Guidelines for Using the Receivables to General Ledger Reconciliation Report

Use the Receivables to General Ledger Reconciliation report to facilitate the reconciliation of receivables data to the general ledger.

The interactive reporting capability of the Receivables to General Ledger Reconciliation report provides both Summarized and Detailed reconciling data for review:

The Summary report lets you see receivables and accounting beginning and ending balances, as well as summarized activity for the period and how this activity was accounted.
Drill down on any amount in the Summary report Difference column to display the Differences Detail report for that item. The Differences Detail reports display the details that make up balances from the Summary report, and indicate potential causes for differences between actual and reconciling amounts.

If you have a ledger and business units enabled for Multifund Accounting, you can also use the Receivables to General Ledger Reconciliation Report to review and reconcile detailed receivables distributions.

Note: For a more efficient reconciliation, don't allow general ledger sources other than Receivables to post to Receivables accounts.

If you restrict the number of general ledger accounts that you include in a run of the Prepare Receivables to General Ledger Reconciliation program, this can affect the display of data in the detail reports and may be the cause of a difference between the accounted amount of a transaction and the reconciling amount.

For example, if Receivables transactions are recorded against balancing segment values 1, 2, 3 or natural accounts A, B, C, and the account range you used excluded some of these values, then these transactions would show up as differences on the report.

If you're downloading a large amount of data from the report to a spreadsheet and you plan to perform a number of data manipulations, use the CSV format. If you're downloading data for reference purposes only, use the Excel or PDF format.

Review these additional guidelines for using the Receivables to General Ledger Reconciliation report:

Differences between Transactional and Accounted Amounts
Differences between Summary and Detail Amounts
Differences between the Reconciliation Report and the Aging Report
Recommendations for Reconciling by Business Unit and by Intercompany Activity
Recommendations for Reconciling Unapplied and Unidentified Receipts and On-Account Items
Recommendations for Reconciling Bills Receivable

Differences between Transactional and Accounted Amounts

Ideally the Summary report displays no differences between receivables transactional amounts and accounted amounts. In addition, the beginning and ending receivables balances normally agree with the Receivables Aging by General Ledger Account reports.

Note: It can happen that the Summary report contains variance amounts. If the Summary report contains variance amounts, contact your system administrator.

Any differences that you find require further investigation and possible correction. Common reasons for differences between transactional amounts and accounted amounts include:

Transactions that aren't accounted.
Transactions with subledger accounts that fall outside the account range of the report.
Transaction amounts don't agree with the subledger journal line amounts.
Journals are posted to the subledger or general ledger that didn't come from Receivables.
Subledger journals weren't transferred or posted to general ledger.

Transactions assigned transaction types that have the Open Receivable option set to No appear in the Other Accounting section of the report, even though these transactions were posted to Receivables accounts assigned the financial category of Accounts Receivable.

After finding and correcting discrepancies, you must re-run the Prepare Receivables to General Ledger Reconciliation program and review the Summary report.

Note: Some differences may be valid. For example, if you included unapplied and unidentified receipts in your extract, but you don't post these receipts to a receivables account or an account with the financial category of Accounts Receivable assigned, then these receipts appear as a difference outside the account range of the report. In this case, you can re-run the extract and exclude these items.

Differences between Summary and Detail Amounts

The Non-Receivables Begin Balance amount is any portion of a general ledger account beginning balance that didn't originate from Receivables transactions. You can drill down on this amount to see a list of general ledger journal lines that have an accounting date that falls within the current fiscal year but prior to the period of the reconciliation report; and that have an account combination that falls within the account range of the report.

The drill-down page doesn't include non-Receivables journal lines dated in previous fiscal years, which means that these journal lines won't match the Non-Receivables Begin Balance amount. The drill-down page is only intended to provide current fiscal year journals that might have posted erroneously to the receivables account.

The journal source of these journals isn't typically Receivables. However, you may see manual subledger journal entries that were entered for the Receivables source directly into the subledger but not necessarily linked to a specific Receivables transaction. Most of these entries represent adjustment journal entries.

Manual subledger journals created during the current reconciling period display in the Summary report in the Other Accounting section, and become part of the Non-Receivables Begin Balance amount in subsequent periods. Manual general ledger journals that may affect receivables accounts are created directly in the general ledger and don't display in the Other Accounting section on the Summary report, but display instead in the Non-Receivables Activity amount.

Summary amounts may not reflect totals on detail pages because:

Data was modified after the data extract was run for a given accounting period. If transactions or accounting were created or modified between the time the extract was executed and the moment you drill down from a summary amount to its detail amounts, the summary amount won't reflect the detail page totals.

To limit discrepancies between the summary and detail reports, set the Receivables accounting period status to Close Pending or Closed.
Security rules in your setup may restrict you from seeing data from certain business units or segment values.

Ensure that appropriate security is given to users for all business units and accounting flexfield segment values that each user is responsible for reconciling.

Differences between the Reconciliation Report and the Aging Report

You may find differences between the data displayed in the Receivables to General Ledger Reconciliation report and the Receivables Aging by General Ledger Account report. This list provides the principle reasons why this occurs and recommendations for working with these differences:

Intercompany Transactions: You can't limit the display of intercompany transactions on the Receivables Aging by General Ledger Account report. If the reconciliation extract either excludes intercompany transactions or displays intercompany transactions only, then the Receivables to General Ledger Reconciliation report and the Receivables Aging by General Ledger Account report won't display compatible data.
Unaccounted Amounts: The Receivables Aging by General Ledger Account report doesn't display unaccounted activity. Unaccounted amounts display as differences in the Summary Reconciliation report. In this case, compare the Accounting End Balance with the Receivables Aging by General Ledger Account report. You will need to subtract out any amount in Other Accounting, as this isn't included in the Receivables Aging by General Ledger Account report.
Receipts at Risk: The Receivables Aging by General Ledger Account Report has the option to display or ignore Receipts at Risk. The Receivables to General Ledger Reconciliation report doesn't use this option, and always excludes receipts at risk. For reconciliation purposes, be sure to exclude receipts at risk when running the Receivables Aging by General Ledger Account report.
Open Credits: The Receivables Aging by General Ledger Account report has the option to Age, Summarize, or Exclude open credits. For reconciliation purposes, the recommendation is to Age or Summarize open credits.

Caution: Don't use Advanced Collections Aging reports for reconciliation because they don't include general ledger account information. This applies to these three reports:

Recommendations for Reconciling by Business Unit and by Intercompany Activity

To reconcile by business unit, you need to have an implicit mapping of the business unit to one or more primary balancing segment values. When you run the Prepare Receivables to General Ledger Reconciliation program, you must specify both the business unit to reconcile and the balancing segment value or range of values assigned to that business unit. The Business Unit parameter selects the receivables activity and the balancing segment value selects the accounting data.

You have three options for reconciling Intercompany activity:

Include Intercompany activity with other Receivables activity.
Exclude Intercompany activity from reconciliation.
Include only Intercompany activity.

If you want to include Intercompany activity with other Receivables activity, set the Include Intercompany parameter to Yes and include the Intercompany account in the range of account values to extract. By default, if no account range is selected, all accounts with the financial category of Accounts Receivable are included in the extract.

If you want to exclude Intercompany activity from reconciliation, set the Include Intercompany parameter to No, and also exclude the Intercompany range of accounts from the extract.

If you're reconciling only the Intercompany activity, set the Include Intercompany parameter to Intercompany Only, and select the account range for your Intercompany Receivables accounts.

Recommendations for Reconciling Unapplied and Unidentified Receipts and On-Account Items

If you want to exclude unapplied and unidentified receipts, and on-account items, from reconciliation, set the Include Unapplied and Unidentified Receipts parameter and the Include On-Account Items parameter to No, and exclude the respective ranges of accounts from the extract. To avoid reconciling differences, don't post unapplied and unidentified receipts, and on-account items, to the same general ledger accounts as that used for transactions. If these receipts and items are posted to the same accounts, then the accounting for transactions is also excluded.

If you never include unapplied and unidentified receipts, or on-account items, in your reconciliation, then don't assign the financial category of Accounts Receivable to these accounts in your chart of accounts setup.

Note: Receivables to General Ledger reconciliation doesn't include miscellaneous receipts. Ensure that you don't assign the financial category of Accounts Receivable to miscellaneous receipt accounts.

Recommendations for Reconciling Bills Receivable

Two rows on the Summary report display bills receivable activity for the accounting period:

Bills Receivable: Bills receivable created (unsigned or drawee-issued), accepted (signed), and canceled during the accounting period.
Bills Receivable Applications: All customer transactions applied to bills receivable created, accepted, and canceled during the accounting period.

The totals for Bills Receivable and Bills Receivable Application net to zero, because both sides of the creation of bills receivable and the application of transactions, or unapplication in the case of canceled bills, are recorded here. Creation and Acceptance require the assignment of transactions to the bill receivable, so each of these bills display the associated transaction applications. Cancellation reverses the bill receivable and its applications, so canceled bills display both sides of the activity, application and unapplication.

Status changes to Remitted, Unpaid, and Factored bills receivable have an accounting impact only because, as the bill goes through its lifecycle, only the account it posts to changes. These events display in the Summary report in the Other Accounting section. Like all other events related to reconciliation, the accounts used for these activities need to have the financial category of Accounts Receivable assigned to the natural account segment in the chart of accounts.

Other activities against bills receivable are included in existing sections of the Summary report and the related drill-down reports. On-account credit memos against a bill receivable display in the Invoices section, along with all other transaction activity. Receipts applied to bills receivable display with other receipts in the Applied Receipts section.