Creditors Reconciliation
- Creditors control account is a summary of all transactions a ecting creditors account
- Total of individual creditors accounts in creditors ledger = balance in creditors control account @ end
of month
- If they do not equal, there is a mistake that must be found and corrected
- Control account is sent/received from debtor/creditor at the end of the month as a statement
- This statement must be compared with control account to nd the error
- If we cant get them to agree, we are not controlling our creditors properly
Di erences could be due to
- Di erent dates the documents were prepared on
- Invoices omitted or recorded wrong
- Credit/ debit notes omitted or recorded wrong
- Amounts paid + discounts recorded wrong
- Adding errors
- Transactions not recorded
- Interest omitted
Process
Suppliers error (them) Create Creditors
We must notify them of Reconciliation to
Compare statement error calculate correct balance
debits vs CL credits
(Vice versa)
Highlight di erences Our error
Correct CL to calculate
Correct CL often using
correct balance
GJ entries to process
Debtors Statement (sent to us)
- We are the debtor
- From the suppliers point of view
Debit Credit Balance
+ -
Brought Forward xxx
Purchases (invoices) xxx
Returns (credit notes) xxx
Payments (receipt) xxx
Discounts (discount) xxx
ffff
ff fiff
- Creditors control account is a summary of all transactions a ecting creditors account
- Total of individual creditors accounts in creditors ledger = balance in creditors control account @ end
of month
- If they do not equal, there is a mistake that must be found and corrected
- Control account is sent/received from debtor/creditor at the end of the month as a statement
- This statement must be compared with control account to nd the error
- If we cant get them to agree, we are not controlling our creditors properly
Di erences could be due to
- Di erent dates the documents were prepared on
- Invoices omitted or recorded wrong
- Credit/ debit notes omitted or recorded wrong
- Amounts paid + discounts recorded wrong
- Adding errors
- Transactions not recorded
- Interest omitted
Process
Suppliers error (them) Create Creditors
We must notify them of Reconciliation to
Compare statement error calculate correct balance
debits vs CL credits
(Vice versa)
Highlight di erences Our error
Correct CL to calculate
Correct CL often using
correct balance
GJ entries to process
Debtors Statement (sent to us)
- We are the debtor
- From the suppliers point of view
Debit Credit Balance
+ -
Brought Forward xxx
Purchases (invoices) xxx
Returns (credit notes) xxx
Payments (receipt) xxx
Discounts (discount) xxx
ffff
ff fiff
