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How to Reconcile Your Accounts Receivable Account

Cindy Scott

Cindy Scott

The Microsoft Dynamics AX/D365 Support Team at Avantiico is focused on solving our client’s problems, from daily issues to large and more complex problems. Cindy is a true AX veteran and hold 20 years dedicated Senior Consulting experiences for Microsoft Dynamics AX Software.

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In this blog you will learn “How to Reconcile Your Accounts Receivable Accounts” in Microsoft Dynamics AX 2012 R3 and 2012 RTM. The Accounts Receivable Account solution also applies to above versions. Avantiico‘s Senior AX Consultant & Support Service Manager Cindy Scott will guide you through how you reconcile your accounts receivable accounts nice and easy.

Note: This post was last updated in March 25, 2019 to include a step-by-step video as shown below.

Step 1 – Account Receivable Ledger Accounts

Compare the Accounts receivable ledger account(s) to the Customer aging report to reconcile the account or identify a discrepancy that needs to be reconciled.

In this example we will reconcile AR ledger account 130100 as of 4/30/15.

First find the ledger account balance through the Trial balance or Period balance form.

Second, check all Accounts receivable posting profiles to find out which customers/customer groups to run the Customer aging report for that should reconcile to the GL account being reconciled, 130100 in this case.

In the below screenshot we see that Customer group 90 posts to a different ledger account so we will exclude that Customer group when running our AR reports.

Accounts Receivable Setup Customer posting profiles

Then run the Customer aging report and compare to the ledger account balance.

Accounts Receivable Reports Status Customer Aging
Figure 3 – Accounts receivable > Reports > Status > Customer aging

In this example below, there is a discrepancy of $10,100.00 as of 4/30/15:

Ledger account 130100:$8,471,198.03
Customer aging report:$8,461,098.03
Discrepancy:$10,100.00

Step 2 – Account Reconciliation Report

Run the Customer reconciliation report to identify any transactions that posted to the ledger. Do not run the subledger (customer) or the subledger (customer) but not the ledger.

Figure 4- General ledger reports reconciliation customer
Figure 4 – General ledger > Reports > Reconciliation > Customer > Customer
Results of customer reconciliation report reflecting a difference of 10
Figure 5 – Results of Customer reconciliation report reflecting a difference of -$10,100.00

This report shows that on 2/28/15 there were 2 transactions that posted a Ledger balance, but not a Customer balance. These account for the full $10,100.00 discrepancy.

Drill into the vouchers to view the transactions that caused the discrepancy. The below screenshot shows the two transactions were created in a General journal and posted directly to the ledger account without posting to the subledger (customer) account.

Journal entry with the entries causing the 10100 00 discrepancy.
Figure 6 – Journal entry with the entries causing the $10,100.00 discrepancy

To prevent this type of discrepancy, always make sure the ‘Do not allow manual entry’ checkbox is marked on the ledger account to avoid direct posting to the account. This setting requires that all transactions post through the subledger accounts.

Figure 7 – Mark the ‘Do not allow manual entry’ checkbox on the ledger account to prevent posting directly to the AR ledger account.
Figure 7 – Mark the ‘Do not allow manual entry’ checkbox on the ledger account to prevent posting directly to the AR ledger account.

Occasionally the discrepancies are not as clear in the Customer reconciliation report and the problem is not due to direct postings to the GL account. When there might be a discrepancy within the subledger (customer) balances, compare the Customer aging report balance to Customer balance list with credit limit report balance to identify any discrepancies within a customer account.

The Customer balance list with credit limit report shows the customer summary balances that posted to the ledger. Sometimes the Customer aging report can be off from the ledger due to settlement dates, prepayments or other issues. If there is a discrepancy between these 2 reports, then compare the individual customer balances on the reports to identify the problem customer account(s).

In our example, the Customer balance list with credit limit report ties out to the Customer Aging report.

Figure 8 – Accounts receivable > Reports > Status > Customer balance list with credit limit. Ties to Aging report balance.
Figure 8 – Accounts receivable > Reports > Status > Customer balance list with credit limit. Ties to Aging report balance.

Once the reconciliation issues are addressed make sure the proper steps (fix setups, training, etc) are taken to avoid the same problems in the future.

Now that you know how to Reconcile Accounts Receivable, the Accounts payable reconciliation can be accomplished in a similar way using similar reports in the Accounts payable module.

Accounts Receivable Accounts Training

For more information about Accounts Receivable Account and how you can Reconcile Accounts Receivable in Microsoft Dynamics AX2009, AX2012 R2, R3, D365 contact our Dynamics experts for training proposal, demos etc. on info@avantiico.com.

If your organization are considering a move to Microsoft Dynamics 365 for Finance & Operation you can watch this (How to upgrade from Microsoft Dynamics AX to Dynamics 365 Finance & Operation?) upgrade tutorial where Michael Oakes take you through the different upgrading paths. You can also schedule a demo designed for your needs – Tell us about your needs, requirements, budget and number of users and we will get back to you –  info@avantiico.com

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