CAT / FIA FFM Syllabus F. Credit Management - Accounts Receivable Reconciliation - Notes ^{3 / 4}

The accounts receivable aging report itemises all receivables in the accounting system, so its total should match the ending balance in the accounts receivable general ledger account.

The accounting staff should reconcile the two as part of the period-end closing process.

If there is a difference between the report total and the general ledger balance, the difference is likely to be a journal entry that was made against the general ledger account, instead of being recorded as a formal credit memo or debit memo that would appear in the aging report.

The aged trade receivables analysis

is an important means of tracking outstanding balance.

With the information you have available, you need to be able to recognise when a customer account is running into trouble. 

Ultimately you may need to provide against certain debts as bad or doubtful

However you do need to know what remedies are available in law (particularly under the insolvency legislation) to recover at least part of the debt.