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If the account receivable balance of the company differ from that of the customer company accounts what will be the reasons?

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Question added by SULTAN-E- ROOM , Head Accountant , DALLA DRIVING ACADEMY
Date Posted: 2016/08/18
MOHAMMAD SARFARAZUL HASSAN
by MOHAMMAD SARFARAZUL HASSAN , Financial Analyst , Spectra Support Services

1. Invoince not posted by any of company

2. Sale recorded but invoice not received by customer

 

manseer muhammed ali
by manseer muhammed ali , Accountant General , Royal Lighting L.L.C & Royal Furnishing LLC

Many reasons, 

1. Customer not received the Invoice

2. Invoice didn't posted.

3. Transfer made by customer not shown in company'S books of accounts

4. Company may issue Invoice once they receive the LPO.

etc etc

Alaine Vincemont Buscaino
by Alaine Vincemont Buscaino , Finance Associate - Business Planning , SONY GLOBAL BUSINESS SERVICE

It's either there was no debit AR recorded upon sales or no credit AR recorded upon receipt of payment.

Anil Lalwani
by Anil Lalwani , Chief Accountant , Al Ahli Hospital

It is a matter of reconciliation between 2 accounts one which we have maintained (customer's Ledger a/c) another which they have maintained (our Ledger account in customer's books).

Here are some examples:

  1. Products sold to customer but he not entered (may be because delay in receipt of invoice by him)
  2. Short amount paid by customer and same amount treated as discount by him.
  3. Payment cheque kept ready by customer but not collected by us.
  4. Any Debit note or credit note entered by customer directly without knowledge.

Waqas Khan
by Waqas Khan , Advisory Consultant , Grant Thornton Abu Dhabi

Many reason could be or any of four type of error.

Omission Error

Commission Error

Compensating Error

Error of Orginal entry

The Above error can be either side to reslove this error make reconcilation with third party.

 

Ray John Loyola
by Ray John Loyola , Client Relations Executive , Fusion Support Services

There is one ultimate reason and that is CORRUPTION.

Ahmed Ezzat Mohamed Nasr
by Ahmed Ezzat Mohamed Nasr , Finance Director , M. Alriyadh Co. (Group of Co.)

I think that all the reasons uttered by respected colleagues in the previous answers fully correct.

gopalakrishnan m s
by gopalakrishnan m s , Head - Finance and accounts , Avasarala Technologies Ltd

one - sale entry not taken in the books of customers and 

two - receipt of payment made by the customers has to been reflected in the books of the seller

three - credit / debit note issued by customer and/or seller is not accounted either of one books of accounts

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