Accounts Payable
Santa Rosa

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.

Accounts Payable in Santa Rosa

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?

Reconciling 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

  1. 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.
  2. Look at the accounts payable in Santa Rosa 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.
  3. 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.
  4. 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.
  5. Check that the proper figure was copied to the general ledger from the accounts payable journal.
  6. Make sure that all posting was completed before the aged accounts payable report was printed.
  7. 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.
  8. After checking this information, make any adjustments that are necessary to correct any errors on the reports you're using.
  9. 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.

Remember, 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 basis.

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. 

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