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This blog will help you gain a better understanding of how to reconcile sub-ledgers to the general ledger in Microsoft Dynamics 365 Business Central and NAV.

The reconciliation checks for each period sub-ledger so that the balances of the general ledger accounts in general ledger match the balances of the assigned sub-ledger accounts. For example, compare the balances of the trade debtors accounts in a general ledger against the balances of the assigned customer in receivable.

This process helps you find differences between sub-module (i.e. receivable, payable, bank) and general ledger. The general ledger balance for the receivable should agree with the total on the report generated from the sub-module (i.e. aged accounts receivable).

Normally, if you are posting everything through from the sub-ledgers to the general ledger, the balances should match without any issue.

What can cause a difference in the sub-ledger and general ledger balances?

There are a few factors that can cause discrepancies between sub-ledgers and the general ledger balances:

  • Entries posted in the sub-ledger is adjusted/corrected at the general ledger level.
  • Manual posting to the sub-ledger control account in the general ledger.

Therefore, we suggest that you regularly review the general ledger accounts to ensure the control account (account assigned in posting group such as customer, vendor, bank, fixed asset and inventory) does not allow direct posting to the G/L account.

reconciling general ledger and sub ledger in Business Central

What accounts should be reconciled in the general ledger?

The general ledger account should be setup in posting group such as:

  • customer posting group,
  • vendor posting group,
  • bank posting group,
  • fixed assets posting group, and
  • inventory posting

This determines which general ledger account system posts the transaction. Therefore, the total value generated from the sub-module needs to match with the control account in the general ledger.

What reports should be used for general ledger reconciliation?

As part of the reconciliation process, we recommend that you run the following report for the reconciliation:

General Ledger

  • Trial balance
  • Details trial balance
  • Account schedule

Receivables

  • Aged account receivable
  • Reconcile customer and vendor accounts

Payables

  • Aged account payable
  • Reconcile customer and vendor accounts

Cash management

  • Bank reconciliation
  • Bank account – detail trial balance

Fixed assets

  • FA book value 01
  • Fixed asset – G/L analysis

Inventory

  • Inventory valuation
  • Inventory – G/L reconciliation