Clean Up Your Ledgers!

Even without a Year End looming, Finance and Accounts teams are always busy and it only takes one or two entries on either the sales or purchase ledger to be mis-posted or incorrectly updated before the Finance Controller or Manager has to take time out to clean it up. It’s often these ‘clean ups’ that can end up taking hours, after which everything starts to fall behind schedule. Quite simply, if you’re not accurate first time – every time – processing can get messy.

Here are three pinch points to watch out for:

Credit balances on your debtors ledger: Money has been received from a customer and allocated to the customer account but there is no corresponding sales invoices to credit it to because either it has not been raised or is in a different month and hasn’t been netted off.  Often these are many months – if not years – old.  They take time to investigate but material ones may result in incremental revenue to the P&L.

Debit balances on your creditors ledger: The mirror opposite of the point above where money has been paid to a supplier but there is no supplier invoice on the system to match against the payment. Again, these need investigating to determine if the money is recoverable. More than likely, the invoice never got posted in which case this could have a negative impact on the P&L as a dummy invoice has to be posted. The older they are the more digging is required.

Collections: In SMEs, cash collection is often part of a Finance Manager’s role when they have time to do it.  Often a lot of working cash is tied up in invoices that need collecting and this needs be managed correctly as it can in some situations release a lot of funds.

We estimate that thousands of Accounts teams up and down the country need an extra pair of hands for a time to give their ledgers a good tidy up. If you’re experiencing some of the pinch points mentioned above, fdu’s Interim Practice can provide a practical solution, providing access to the right people for your industry quickly and efficiently.  Get in touch and get those ledgers in good shape – you know there is always a Year End coming.

By | 2017-08-18T08:53:00+00:00 August 17th, 2017|News|Comments Off on Clean Up Your Ledgers!

About the Author:

David Bloom, CFO

David is CFO at fdu. He is an experienced commercial international CFO in media and technology with 20 years working with fast growth public and private companies including Getty Images (NYSE: GTY), Glu Mobile (NASDAQ:GLUU), Keystone Software PLC (AiM) and KPMG.