The debtors ledger is an "open item" system which needs each invoice outstanding to be entered to reconcile the account balance. This can be quite a daunting task for a business that has previously operated on balance forward debtor accounts.
However, the additional information that the customer will receive together with the reduced monthly reconciliation headaches for customers who have lost track of what their balance is made up of, will more than compensate for the extra work required initially. Open item debtors also require that any money received is allocated to outstanding invoices. Ideally, all the opening transactions should be entered immediately prior to a month end.
Opening balance transactions can then be easily identified as belonging to a period when no normal business was effected. The first step is to ensure that the General ledger interface is disabled to prevent journals being created to sales and debtors control account for invoices which relate to a prior period. It is suggested that reconciliation's be prepared during the month prior to going live for all customers - if an open item system was used previously, then the statement will provide all the information necessary for input.
All invoices (and credit notes) outstanding need to be entered to reconcile the balance on the customer's account, using the same exchange rate as was used when the invoice was originally created. It is recommended that the actual date of the invoice is used as per the original invoice and a reference of the old invoice number is used so that it is easy to cross reference the new invoice number to the old one.
