Invoices posted to the wrong General Ledger account.

The contract set up is a common reason for incorrect accounts. The wrong General Ledger account is selected on the Contract Item, Accounts tab. Only enter accounts on this tab if the item needs to post to different accounts than the defaults. Leave it blank to use the defaults. To check your default accounts go to AR Settings, GL Settings, and then Balance Sheet Accounts or Revenue.

If the contract item uses incorrect accounts, then any invoices posted to those accounts will make Accounts Receivables out of balance with General Ledger.

Example:

You entered the Retainage account in the Accounts Receivable field on the Accounts tab. Both the Accounts Receivable and the Retainage Receivable post to the same account. This makes AR and GL not balance.

1. Go to Accounts Receivable, Reports, Reconciliation, Batch reconciliation to GL.
2. Enter the Accounting dates from and to for the period you're reconciling.
3. Click Conditions and click Add.
4. Select Transaction type, Equal to, and select Invoice.
   Note: If you use Billing, repeat steps 3 and 4 and select Issued Invoice.
5. Review the report for any of the following:
   • Accrual Debit Accounts that aren't the Accounts Receivable account.
   • Retainage or Accrual Credit accounts that are the Accounts Receivable account.
6. If either of the above exist, void the affected invoice and make corrections.

Sometimes, the answer is to track the affected invoices until everything is paid in full and no balances remain.

Using the Bill Retainage Prep reports in Accounts Receivables to help identify which invoices have a current balance for retainage. You can make journal entries to fix the revenue account (credit account) entries. Accounts Receivable and Retainage Receivable entries affect adjustments, cash receipts and retainage billed for future entries. Adjust those via a file fix or keep track and make journal entries. Alternatively, use other reports to reconcile to the retainage account.

Accounts Receivable and General Ledger are out of balance