Accounts Payable in Santa Rosa - 9 Essential Steps to Reconcile Accounts Payable. Whether accounting is your mainstay or you're just getting started with your new business here in Santa Rosa, reconciling your accounts payable balance is a very important part of your organization’s financial business cycle.
Knowing how much you owe others help to determine your business' financial soundness, cash flow and actual worth. But how do you know that your accounts payable are accurate?
your accounts payable ledger balance against your general ledger's accounts
payable account helps to catch errors quickly and efficiently, provided that it
is done on a regular basis. Though it may sound like a difficult process,
reconciling your accounts payable ledger against your general ledger can
actually be a simple and straightforward process. Here's how:
The 9 Essential Steps to Reconcile Your Accounts Payable in Santa Rosa
- Take a look at the
balances from the end of your last reporting period in your general ledger's
accounts payable account against the aged accounts payable detail report from
the same time period. If they don't match, you'll need to go through the
following process for earlier reporting periods until you get to one that
matches and therefore doesn't need to be reconciled. If you do need to go back,
just remember that once it's caught up, you'll only need to do one reporting
period at a time, making the job go more smoothly and easily next time.
- Look at the accounts
payable account in the general ledger to see if there are any journal entries
that were made during the reporting period you're working on. If there are, be
sure to record them on your reconciling spreadsheet.
- Print a copy of the aged
accounts payable report for the reporting period you're reconciling. On the
reconciliation spreadsheet for that reporting period, enter the total amount
that is outstanding from that report. This should make the amounts match. If
not, proceed to the next step.
- If you have a
discrepancy, there are three areas where it can occur. Take the time to verify
whether the information is correct in the next three steps to find where the
error is occurring. Once you've found it and verified that the other areas are
correct, you've eliminated the areas where the error could have occurred and
will know where to look.
- Check that the proper
figure was copied to the general ledger from the accounts payable journal.
- Make sure that all
posting was completed before the aged accounts payable report was printed.
- Verify that the general
ledger is set to the appropriate reporting period. If it's pulling information
from outside this period, the balances will be skewed with information from
other reporting periods.
- After checking this
information, make any adjustments that are necessary to correct any errors on
the reports you're using.
- Now that you've
completed any necessary adjustments, run your general ledger's accounts payable
account and accounts payable ledger balances again. They should match at this
point. If not, repeat steps 5 through 9 again to find the discrepancy.
the first time you are reconciling the accounts is always the most difficult,
because you need to practice a relatively new skill or use a new system and
correct any errors in it. After it's been straightened out, it's much easier to
simply update and verify your balances to get the correct figures on a regular
How often you want to do this depends on how much business you do, how
often you have accounts payable entries posted to the accounts and how up to
date you need your business' data to be. By maintaining your accounting
records, it's easy to come up with reports on your business' liabilities and an
accurate financial outlook for it. If you are a local business owner here needing accounts payable in Santa Rosa and balancing your accounts payable still feels to much of a challenge, please do not hesitate to contact me for outsourced bookkeeping services, I will be happy to assist you.
Accounts Payable Articles
Learn more about Accounts Payable
Read about Calculating Accounts Payable
Find out about the Accounts Payable Spreadsheet
Read how Accounts Payable Affect Cash Flow
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