Run the Verify Clients/Matters and G/L Balances report, which is in Firm & Financial > Verify Client/Matter & G/L Balances to display the general ledger control accounts and the Client/Matter subledger balances.
Note:
- The below example reflects that all is balanced.
Verify Clients/Matters and G/L Balances Sample Report
The Verify Client /Matter and G/L Balances report is used to verify that the firm’s Clients/Matters subledger and General Ledger transactions are in balance. This report checks for an imbalance between the General Ledger control accounts and the Clients/Matters ledgers, and between the General Ledger debits and General Ledger credits.
When a transaction is entered for a Clients/Matters the software automatically updates the appropriate General Ledger accounts.
Balanced example, when a Trust cheque is entered, the Client Funds in Trust Liability account is debited and the Trust Bank account is credited. The above-mentioned report will be balanced for the Trust Balances – Client Funds In Trust and Trust By Bank – Bank Number.
Not in Balance example, If an error occurs when posting a transaction, the Clients/Matters ledgers or General Ledger may be updated incorrectly. This discrepancy will display on the Verify Client/Matter and G/L Balances report because the General Ledger total will no longer equal the total for the Clients/Matters ledgers. Journal entries cannot be posted to these G/L accounts, they will always cause the G/L and the Client Ledger to be out of balance.
The report will display a message indicating accounts are out of balance and will show the account where the problem lies.
Note:
- If an error occurred while the General Ledger was being updated, the amount debited may not equal the amount credited. The report will also indicate this with the message “General ledger is out of balance” and will display amount it is out of balance by.
Verify Client /Matter and G/L Balances Discrepancies
The steps below serve as a guideline to help in determining where the problem may have occurred. Correcting journal entries should not be done unless it is understood how the entries will affect the Clients/Matters subledger and General Ledger balances.
- Determine when the system last in balance and then focus the investigation on transactions entered since that time.
- When the types of entries have been determined that affect the out-of-balance accounts, review all audits of that type that have been entered since the software was last in balance. Look for an amount related to the account that is out of balance. It is helpful to view the Transaction Listing by Audit report when looking for accounts that are out of balance.
- When an audit is identified that is related to the problem, determine if the audit updated the general ledger by viewing the Transaction Listing by Audit report for the specific account that is out of balance. Look for the audit number.
- Determine if any clients or matters were updated by checking the client details for the audit number.
- If any clients/matters were updated but the general ledger was not, create a journal entry in the general ledger specific to the audit and to any automatic client/matter journal entries.
- Review any automatic journal entries to determine the type of entries that may have affected the account or accounts that are out of balance.
- If a Trust bank is out of balance review the Trust cheque, Trust receipts and Trust transfers to pay bills.
- If the general ledger was updated but the clients/matters were not, create a journal entry to reverse the transaction out of the general ledger, and then re-enter the audit.
Tips:
- It is recommended that this report is run and a copy saved of the balanced report to a file. This will provide a reference point, when the report displays as Out of Balance in the future, as shown in the examples above, we know that at audit 3443 the system was in balance. Now that audit 97089 it is out of balance, when we review audits for the problem we can focus on audits greater than 3443.
If you are unable to resolve the discrepancy, please submit a ticket.