Accounting 3

CHECK REGISTER REVIEW. AP SUBLEDGER REVIEW. AP SUBLEDGER COMPARED TO GL

This class will compare Bank Account names in the COA (GL) to the Check Register; review the AP Subledger; compare the Status Age Report (subledger detail report) to the AP Aging report (GL detailed report).

TRAINING PHILOSOPHY

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KEY TERMS

Chart of Accounts (COA) – Master list of financial accounts. Accounts may be added to the chart of accounts as needed. If any transaction has been posted to an account or if there is a non-zero balance, the account should not be removed.

General Ledger (GL) – Provides the balance of each of the accounts in the COA. GL Accounts are grouped into categories: assets, liabilities, equity, revenue and expenses. Examples include bank accounts, accounts receivable, accounts payable, sales and fixed assets

Subledger – Contains the details of every business transaction. Examples include customer accounts, vendor accounts, check register, and inventory.

Accounts Payable General Ledger - The general ledger for accounts payable is the ledger account in which the totals of vendor transactions are recorded. The balance of the general ledger account at any point of time should reflect the total liability amount due to vendors. **Cash term transactions are not typically recorded in accounts payable.

Accounts Payable Subledger – The AP subledger is a detailed list of unpaid and paid bills managed through the AP GL. As soon as an item or a bill (with payment terms) is received, it is entered and listed as unpaid in the AP subledger. The bill payment is then managed based on cash management processes. Once paid, the bill is marked paid in the subledger, the bill amount is no longer part of the AP liability balance and the payment details are added to the bill.

SECTION 1. BANK ACCOUNT SET UP

1. Sync Bank Account names in the COA to the Check Register

Go to the COA and confirm the banks are named appropriately. Make note of the Name & GL #.

→Accounting>D. Chart of Accounts

COMPARE GL Account Description TO Checking Account Name

Go to the Check Register.

→Accounting>C. Check Register

Are the Names & GL #’s in the Checking Account List the same as in the COA?

If not, click Edit {F4] and enter bank account names to match COA

NOTES

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SECTION 2. ACCOUNTS PAYABLE SUBLEDGER REVIEW

AP subledger provides details of purchases made on credit, returns on credit and payments.

AP can be reached from the Accounting Menu. From this view, all vendor details are listed.

AP can also be reached from the Vendor File. From this view, AP is filtered to the currently viewed vendor account.

Menu Review

Column Descriptions:

Vendor - Vendor ID as setup in the Vendor File

Invno # - Bill number as issued from vendor

Inv-Date - Bill date as issued from vendor

Inv-Amt - Bill amount as issued from vendor

Other Information - PO# if processed by Receiving or return amount and description

Pay-mrk:

O=Unpaid, entered in AP via Purchasing Receiving process, waiting for approval to pay

N=Unpaid, approved but not selected for payment

P=Approved, selected to be paid (if P + N in Open column, invoice has been paid)

H=Unpaid, hold, not approved to be paid

R= Payment less Return Amount

Openinv - If field is blank=Unpaid, If field has a N= bill has been paid

Due-Date - Due Date on the Payable invoice, as calculated by Terms data in Vendor File

Discount - Early pay discount deduction from bill

Balance - Inv-Amt minus Discount = Balance

Function Key Descriptions:

Ok - Exit Accounts Payable subledger

New [F2] - Enter a new bill for the Vendor shown in Vendor Name field

Find [F3] - Search all accounts payable records (unpaid + paid)

Edit [F4] - Edit the selected bill

Delete [F5] - Delete the selected bill

Pay [P] - Mark the selected bill to be paid on next check run

No [N] - Mark the selected bill to NOT be paid on the next check run

Options [F6] - Accounts payable management functions including auto pay, reports and sort

Print [F7] - Accounts payable printing functions including print checks, AP Aging and electronic documents

Batch [F8] - Batch print check functions

Pd/Cur [F9] - Toggle function to change subledger view from paid to unpaid bills

Srch [F10] - Search accounts payable database by vendor name

NOTES

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SECTION 3. COMPARING AP SUBLEDGER TO AP GENERAL LEDGER

Introduction to subledger and general ledger reconciliations

The general ledger for accounts payable is the ledger account in which the totals of all vendor transactions are recorded. The balance of the general ledger account at any point of time should reflect the total liability amount due to vendors. **Cash term transactions are not typically recorded in accounts payable.

The accounts payable subledger is the extension of the general ledger where vendor transactions are processed at the vendor level. You can produce a list of outstanding balances per vendor from the subledger, and in theory, the total of this list should agree with the balance of the AP GL liability account. This proves that the accounts payable liability in the general ledger is valid, accurate, and complete.

However, in practice, these balances often do not agree, and therefore, accounts payable reconciliations must be performed. An Accounts Payable Reconciliation is the comparison of the general ledger account balance and the total of the subledger, the identification of differences, and the processing of corrections.

STATUS AGE REPORT (AP subledger report)

Shows vendor unpaid balances based on transactions posted in the vendor account. Cannot modify the report date.

To run report → Accounting>B. Accounts Payable>Print>K. Status Age Report

AGING AP GL# REPORT (AP GL report)

Shows vendor unpaid balance based on debits & credit posted to the AP GL. Run date should match Status Age Report when comparing vendor balances.

To run report → Accounting>B. Accounts Payable>Print>I. Aging AP GL#>Ok (do not change defaults)>Yes

Accounts Payable Reconciliation begins by comparing the vendor balances on each report.

Exercise 1. What happens when a paid vendor bill is deleted or altered?

Using play data, modify a paid invoice and re-run the reports. Review how the vendor account balances do not match. Discuss how to correct it.

NOTES

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Exercise 2. What happens when a partial payment record is deleted or altered?

*REMINDER* Partial Pay Process:

Step 1. Create New debit & credit bills

→ Vendor>Search (bring up vendor records)>AP>Options>E. Partial Payment>enter partial amount to be paid on original invoice

This process will create the following “bills” on the vendor account:

Original invoice # + #1 positive amount

Original invoice # + #1 negative amount

Result is 3 “bills” now showing in unpaid:

Step 2. Pay partial bill

When ready to make a payment, press “P” on the positive partial payment amount and process payment as usual (from checking, with credit card, or by batch)

Step 3. Final Payment

Leave the negative partial payment amount on the unpaid bill screen. to offset the original invoice. Use the negative amount(s) to make the final payments because the negative(s)will subtract from the original positive amount.

Using play data, modify a Vision created partial payment negative transaction and re-run the reports. Review how the vendor account balances do not match. Discuss how to correct it.

NOTES

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Exercise 3. What happens when an Adjustment journal entry is made to AP GL but not to a vendor?

Using play data, enter an adjustment posted directly to AP GL and not to a vendor and re-run the reports. Review how the vendor account balances do not match. Discuss how to correct it.

NOTES

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07-Jun-2022
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Accounting 3

SECTION 1. BANK ACCOUNT SET UP

SECTION 2. ACCOUNTS PAYABLE SUBLEDGER REVIEW

Menu Review

Column Descriptions:

Function Key Descriptions:

SECTION 3. COMPARING AP SUBLEDGER TO AP GENERAL LEDGER

Introduction to subledger and general ledger reconciliations

STATUS AGE REPORT (AP subledger report)

AGING AP GL# REPORT (AP GL report)

Exercise 1. What happens when a paid vendor bill is deleted or altered?

Exercise 2. What happens when a partial payment record is deleted or altered?

Exercise 3. What happens when an Adjustment journal entry is made to AP GL but not to a vendor?

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