Accurate management of accounts payable (AP) is essential for maintaining precise financial records. Occasionally, discrepancies can occur, causing imbalances that require immediate attention. This article outlines an approach to identifying and correcting AP discrepancies, ensuring your accounts remain accurate and dependable.
Discrepancies usually result from two main issues: invoices being recorded as paid before the expense was incurred, or incorrect GL entries made to the A/P account.
We also recommend checking that the import from the prior system was fully completed and that the AP Aging report matches the Balance Sheet and Income Statement reports.
The easiest way to troubleshoot is to narrow down the day the discrepancy occurred by comparing your A/P Report against the Balance Sheet and identifying the day they no longer match.
The image below shows a difference between the Balance Sheet and the A/P Report.
After identifying the date when the discrepancy began, run the General Ledger Report. The example below is filtered from 05/01/24 to 05/03/24 to narrow the search.
The General Ledger report shows that the voucher payments were made on 05/01/24, but the invoice was added and recorded in the GL only on 05/03/24. This discrepancy arises because running the report as of 05/01/24 reveals the issue, while by 05/03/24, the discrepancy is resolved as the invoice is recorded in the GL, and the report shows no discrepancy.
Following the same process, you can identify any discrepancies between the Balance Sheet and the AP report.
The next step to correct discrepancy depends on the needs or rules of the association. You have a couple of options:
- If the Accounting period is open (you can check it from the Association GL Set Up page), you can easily 'Edit' the invoice, change the post date to the same date as the payment or a date before, and click 'Save and Post' in the invoice.
2. You can add a Journal Entry as of 05/01/24 and reverse it on 05/03/24 to correct the discrepancy.