Sunday, January 29, 2012

The Seven Most Common PCLaw Errors – Accounts Receivable Errors


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).


Sunday, January 22, 2012

The Seven Most Common PCLaw Errors – Trust Errors


Trust errors tend to increase when multiple trust bank accounts are used, and when clients have multiple matters. Within this category of trust errors, there are 3 errors that are commonly found:

- simple trust posting errors, usually involving posting the wrong amount or posting to the wrong matter. Just locate the error and correct the entry.

- negative matter trust balances – sometimes the client has sufficient trust funds, but they are not distributed to the various matters as needed to eliminate the negative balances. These errors will reveal themselves when you compare your trust bank reconciliation to your client trust listing.

-  depositing funds or posting to the wrong trust bank account is another common mistake when multiple accounts are used. Simply viewing the client ledger or the client trust listing does not easily draw your attention to this error. Instead, you must run separate client trust listings for each bank account. You may need to transfer funds to correct this error.

As always, I invite your comments and suggestions for future post topics. Next week – Accounts Receivable Errors.