General Ledger distribution posting of invoices and checks batches is critical to the end of year reporting. The Outstanding Invoices report (detailed below) can be run based on GL Journal Entry dates for the invoices and checks. This is designed to provide a report that can be balanced to the Outstanding Accounts Payable liability account balance at year end.

At year end it is critical that invoice batches are separated by the fiscal year the invoice will be expensed to. For example: If your fiscal year starts on January 1, 2022, any invoices that will be expensed to December (Fiscal Year 2021) or any time in the prior fiscal year will need to be in a batch that does not include ANY invoices that are in the new fiscal year (fiscal 2022). Invoices in the new fiscal year will be added to a batch that will have a GL Distribution date in the new fiscal year. Be certain to key the Settings and GL Distribution dates for each batch in the proper fiscal year. This will require 2 batches each time invoices are keyed. Batching and posting the invoices in this manner will mark the AP History expense (invoice) to the proper fiscal year.

Both invoice batches (prior and current fiscal year) can be paid in the same check batch.

Computer Check batches can be batched to pay on the same check date, typically in the new fiscal year. There is no need to separate the prior fiscal and current fiscal year invoices for payment to separate Computer Check batches if they will be paid at the same time. The check date will not affect the fiscal year the GL Distribution is posted to (but commonly does match). The GL period and year from the GL Distribution step of the Computer Check batch will be marked on the AP History records discussed in the invoices section of this document.

These two items (Invoice and Computer Checks) work together to post the AP History in a manner for the Outstanding Invoices report to properly report them.  

Remember that the journal entries created by the invoices batch debits expense and credits AP Liability.  Computer Check batches debit AP Liability and credit Cash. The goal is to have the end of year AP liability have the proper information to match the Outstanding Invoices report provided to the auditor.

It is important to make sure Clearing House Electronic AP batches are committed with the same GL Distribution date as the Computer Checks batch they came from. These entries are posted to the GL separately from the Computer Checks batches but have the AP history records recorded with the Computer Check fiscal period and fiscal year. The accounting for the ACH Checks is to debit AP Liability and credit Cash.

These invoices will likely need to be tracked manually at this point if voided in the next fiscal year. The current report (Outstanding Invoices) does not consider invoices that have a GL Distribution after the Date From field and were voided with a GL Distribution date after the Date To field. Those invoices will still have balances in the AP Liability account at year end. Voided invoices will NOT be included on the Outstanding Invoices report. If voided with the GL Distribution date the same as the original invoices batch this will not be a problem.

Voided Checks are tracked properly at year end in the more recent versions of the software (7.18.0.0 and cloud). Voided Check handling is detailed by version below.

7.18.0 and up - If a check had the invoice posted to the prior fiscal year (before the Date To on the report) and the check posted to the current fiscal year (after the Date To on the report) then is voided in the current fiscal year (after the Date To on the report); it will display on the Outstanding Invoices report. If the check was voided before the Date To the report will exclude the record. This should provide accurate reporting.

Versions prior to 7.18.0.0 - All voided checks will NOT be included on the Outstanding Invoices report if they were voided prior to running the report. On these versions you will need to track outside the system.

Tip:  If your report does not balance, check void transactions first.

Balancing the AP Liability account is necessary to provide a report for audit. The best report to provide this information is the Accounts Payable > Reports > Outstanding Invoices report. The settings for year-end reporting include:

• Group By  Fund, Vendor  This option will group and total the report by Fund then by Vendor showing individual invoices within the Fund. A total for each fund will display to balance to the General Ledger.
• Date Type  Always select JE Date to get data that most closely matches the General Ledger AP Liability Account.
• Date From  Normally the first day of your fiscal year is used for this date. If you have invoices outstanding at the end of the year that would have been expensedto a prior fiscal year you can back date this date as early as you want. The result will still only list invoices that are still outstanding at the Date To field (end of the fiscal year).
• Date To  This would be the last day of your fiscal year. The system will display invoices that have an expense journal entry equal to or before the Date To and a check journal entry after the Date To entered.