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Reconciling Debtors/Creditors to the General Ledger

This article walks you through the recommended process for identifying and resolving variances between your Debtors or Creditors sub-ledger and the General Ledger (GL) Control Account.

Table of Contents

Overview

Step 1 - FX Parameters

Step 2 - Ledger Report

Step 3 - GL Ledger Summary

Step 4 - GL Account Search

Step 5 - Unbalanced GL Batches

Step 6 - Transaction History

Step 7 - Automate Comparison

Quick Reference Summary

 

Overview

Variances between the sub-ledger and the GL Control Account can arise from a number of sources, including:

  • Foreign currency rate mismatches

  • General Journals posted directly to the Control Account

  • Transactions posted from unexpected sources


Work through the steps below in order to systematically identify and resolve the discrepancy.

⚠️Important - Before You Begin

These steps are intended for users with GL and accounting access. If you are unsure about any step, contact your accountant or the Ezy Systems support team before proceeding.

 

📌Note: Instructions are given for the Accounts Receivable module but the same options are also in the Accounts Payable module.

Step-by-Step Reconciliation Process

 

Step 1 — Check the Foreign Currency Parameter

Go to System Administration > System Parameters > Accounts Receivable and check the setting on parameter Acc/Rec: Use Current Currency Rate on TB

  • If set to Yes: either run the applicable Foreign Currency Update (Accounts Receivable > A/R Administration > A/R Foreign Currency Update) to ripple the current foreign exchange rate through to the GL.
    OR
    Set the parameter to No so that the Trial Balance and the Control Account report on the same exchange rate.
  • If set to No: there is no action required for this step — proceed to Step 2.

📌Note: Why This Matters

If the Trial Balance and the Control Account are using different exchange rates, you will see a currency-driven variance that is not a real reconciling item. Aligning the rates first avoids chasing a phantom difference.

     

    Step 2 — Run the Debtor/Creditor Ledger Report
    (RECON Format)

    Go to Accounts Receivable > Accounts Receivable Reports and run Debtor/Creditor Ledger report with Source set to All Sources and the Format set to RECON. 

    Review the output and investigate any variances reported between the GL and the Sub Ledger.

    This report is your primary diagnostic tool and will highlight the bulk of common discrepancies.

     

    Step 3 — Check the GL Ledger Summary for Unusual Postings

    Go to General Ledger > General Ledger Reports and run GL Ledger Summary by Source to check for any General Journals that may have been posted against the Control Account. 

    General Journals posted directly to the Control Account will impact the GL only, not the sub-ledger, and will create a variance. While you are in this report, also check for any other unusual sources that may have posted to the Control Account — such as:

    • Cash Receipts or Cash Payments Journals
    • Any other General Ledger Journal, eg. Standing Journals, Accruals or Distribution Journals
    • Any other source that should not normally hit the Control Account.



    Step 4 — Check the GL Account Usage

    Run General Ledger Reports > GL Account Search to establish if the Control Account is "in use" in areas it shouldn't be.



    Step 5 — Check for Unbalanced GL Batches

    Run General Ledger Reports > GL Ledger Reconciliation and select either Debtors or Creditors as the Sub Ledger. Set "Unbalanced Batches Only" filter to YES.

    Investigate any variances





    Step 6 — Check Transaction History

    If no readily identifiable issue has been found, run GL Transaction History for the applicable GL Control Account and compare it to the Debtor/Creditor Ledger for the same period.

    Look for transactions that appear in one but not the other. These one-sided postings represent the reconciling items.

     

    💡Tip: Narrow the Period

    Start with the current period before going back further. If the current period reconciles, the variance is carried forward from a prior period — progressively step back one period at a time to pinpoint when it first appeared.

     

    Step 7 — Automate the Comparison Using Excel (Optional)

    To streamline the matching process in Step 6, you can export both data sets: Export GL Detail and Export Debtor/Creditor Ledger. Then run the comparison in Excel using Pivot Tables.

    Load both exports into Excel and use Pivot Tables to identify amounts that appear in one dataset but not the other. This is particularly useful when dealing with a high volume of transactions.

     

    💡Tip: Match on Reference and Amount

    Use the transaction reference number and amount as your matching keys. Sorting both datasets by amount before running a Pivot Table can make unmatched items easier to spot.

     

    Quick Reference Summary

    Step

    Report / Action

    What to Look For

    1

    Check Use Current Currency Rate on TB

    Currency rate mismatch between TB and Control Account

    2

    Debtor/Creditor Ledger — RECON format, All Sources

    Variances between GL and sub-ledger

    3

    GL Ledger Summary

    General Journals or unusual sources on Control Account

    4

    GL Account Search

    Control Account used in incorrect areas

    5

    GL Ledger Reconciliation — Unbalanced Batches Only

    Batches that have not posted correctly

    6

    GL Transaction History vs Sub-Ledger Report

    One-sided transactions (in one report but not the other)

    7

    Export GL Detail + Debtor/Creditor Ledger to Excel

    Unmatched items via Pivot Table comparison

     

    Still need help?

    Contact the Ezy Systems support team at support@ezysystems.com.au.