This posting on accounts receivable errors is partly a rehash of previous entries, with some new content added.
As previously discussed, problems can occur when paying multiple invoices/matters at one time – especially if you are paying them out of chronological order. Doing separate payments for the individual invoices will avoid creating this error.
The second error is actually related to billing, but the error result shows up on your accounts receivable report. You have done your bill, entered the payment receipt from the client, but when you run your accounts receivable report, a balance is still showing. Most often, the billing process has captured one time entry two times, and the second time PCLaw seems to treat it as a non-taxable disbursement. So, you end up with a bill for $200 + $26 HST, totalling $226. But your A/R report will show $426.
To catch this error early, compare your billing fees journal to your A/R report on a monthly basis. To correct, remove the payment, undo the bill, redo the bill, and repay.
Since the payment must actually be removed before you can undo the bill, discovering this error a year later is very costly. You must open all of the bank reconciliations in order to correct.
As always, I invite your comments and suggestions for future post topics. Next week – Posting errors (PCLaw generated).