Reconciling accounts on both sales ledger and purchase ledger

Kieron

When reconciling a/cs where there is a balance on the debtors and creditors ledger for the same company,i.ethey are a supplier and a customer, is it best practice to do 2 separate reconciliations, or would the best option be to total the balances from both ledgers and then reconcile from there. May seem like a basic question but I just want clarity on the most common way this is dealt with. Contra's are posted to the accounts so I would assume it is best to add both balances to get a true overall balance.

Thanks

reader

Kieron wrote: »

Contra's are posted to the accounts so I would assume it is best to add both balances to get a true overall balance.

Thanks

I would agree with you; hopefully the reconciliation makes more sense when you look at both ledgers together (rather than separately).

Out of interest, how are you reconciling the ledgers? Have you requested your customer-supplier's ledgers in order to tick off your ledgers against their's? Or are you checking transactions on the ledgers against source documents (e.g. invoices and bank statements)?

Kieron

I did the reconcilition by ticking off against the supplier/customer statements but there had been a contra posted by only one party that meant a misallocation had happened. I balanced the accounts but it was a bit messy and I just wondered what the most common way was. Thanks for the comments/