Sivakumar Venkataraman - Click for blog homepageReconciliation between the Sub Ledger and the General Ledger is one of the most common tasks performed at every close process in every business. There have been various scenarios in which there has been a break between the sub ledgers and the general ledger balances. A few key scenarios are quoted below:

  • A transaction posted in the sub ledger does not have a corresponding transaction in the general ledger.
  • A transaction posted in the sub ledger is backed out/corrected at the general ledger level.
  • Manual posting to the sub ledger control accounts in the General Ledger.

This article provides some tips to avoid any of the above situations and ensure that there is data integrity between the sub ledgers and the general ledger. This will ensure that the periodic audits done in the system proceeds in a smooth manner to a great extent.

The first two errors listed above can be prevented by disabling the following options in the General Ledger setup window from Microsoft Dynamics GP >> Tools >> Setup >> Financials >> General Ledger.

By unmarking the option “Deletion of Saved Transactions”, a journal entry batch that is created when a sub ledger transaction is posted, cannot be deleted at the General Ledger level. This prevents any deletion of a journal entry that was created from a sub ledger transaction.

By unmarking the option “Voiding/Correcting of Subsidiary Transactions”, the system will not allow us to void (or) correct a journal entry batch that is created when a sub ledger transaction is posted. This prevents any voiding of a journal entry that was created from a sub ledger transaction.

Note that if we have enabled “Post Through General Ledger” in the posting setup, the options defined above would not make a big difference since a transaction is posted in the sub ledger get automatically posted in the General Ledger as well. However, the second option mentioned above will not allow the user to back-out (or) back-out and correct a journal entry that was posted for a sub ledger transaction.

The third error listed above can be eliminated by disallowing account entry for all the control accounts. Example of control accounts are the Accounts Receivable, Accounts Payable and Inventory accounts. In the Account Maintenance window which opens from Cards >> Financial >> Accounts, unmark the option “Allow Account Entry” for all the control accounts.


 
This will prevent the user from picking up this account manually in any transaction entry windows and will prompt the message as shown below.


 
This option will prevent any direct posting into the control accounts in the General Ledger. All postings will occur only from the sub ledger module.

These are some key setup options that can help minimize the data integrity issues between the sub ledgers and the general ledger. This saves precious reconciliation time that is spent by many resources during the key audit time.