Nothing makes your financial team smile like a smooth reconciliation to the general ledger (GL). When accounts balance, all seems right with the world. On the other hand, when data fail to reconcile, you must hunt down the root cause(s) and set things straight. Below are the common culprits when detail schedules do not reconcile to the GL in Unanet, along with some troubleshooting steps for four primary reconciliations:
- Deferred Revenue to Trial Balance
- Unbilled Receivables to Trial Balance
- Project Cost Reports to Income Statement
- Indirect Expense Report to Income Statement
Deferred Revenue and Unbilled Receivables
Both unbilled receivables and deferred revenue are represented on the Billing & Revenue Summary, which is where you will begin your troubleshooting:
- Select your Legal Entity.
- If you are using multiple internal organizations, check “Show Owning Org. Codes in filter only” on the Project filter and select the correct org.
- Select Journal date Through as your month-end.
- The report defaults to “Show Billings .” Also, check “Show Revenue.”
- Leave all other conditions the same.
Follow these troubleshooting steps:
- Review the Unbilled column under Billings and the Deferred column under Revenue.
- Make sure there are no amounts in the draft columns for billings or revenue.
- Run the Trial Balance for the period and compare.
Continue with the following actions if your Unbilled Receivables or Deferred Revenue does not match the GL:
☐ Transaction types other than BR and CI were posted to the GL
Start with the GL Detail Report. The only things that affect the Billing and Revenue are Billing and Revenue (BR) posts and Customer Invoices (CI). If you see other entries such as JES, consider reversing these and recording the transaction through the billing or invoicing process as applicable.
Project Cost Report
Run the Project Summary by Cost Element and compare this to the Trial Balance or Income Statement. If there are discrepancies, run the GL detail for the accounts that do not reconcile. When you run the project report:
- Select your Legal Entity.
- Run the report for direct projects only. Exclude any indirect projects.
- Select your date range for your month-end.
- Check “Show Cost Element Details.”
- Use “Actual” rates.
- Check “Include posted data only.”
- Leave all other conditions the same.
Because costs are allocated to projects on the job report based on applying cost pool rates (e.g., fringe, overhead, and G&A rates), reconcile your indirect costs at the total level. The total indirect expense from the income statement should match the total indirect expense on the project report. See our discussion of Indirect Expense Report to Income Statement below for some culprits known to throw off indirect cost reconciliation.
Compare GL Detail to Project Report Detail by project. If the numbers do not match, use the following checklist to troubleshoot:
Revenue – If your revenue does not match:
☐ Journal Entries (JEs) were Posted to Revenue.
Review the transactions in the GL Detail and determine if there are journal entries. Project revenue is recorded through BR posts and CIs. Ideally, these should be the only methods to record revenue transactions.
Journal Entries
- To post to a job, JEs require a project and an expense type. Posting a JE is not recommended. You would need to set up an Other Direct Cost (ODC) Expense Type, map it to a Cost Element, and modify your Cost Report definition to include the Cost Element in the Revenue line.
- Even if you post a JE with the project and expense type, it will not show up on most Project Accounting Reports, notably the Billing & Revenue Summary, Project Control Panel, and Project Funding Summary. For this reason, you should avoid JEs for recording project transactions.
☐ Revenue Changes on Project Summary Report If Run with “Include Posted Items” Is Checked.
The difference is likely due to unposted revenue. Run the Billing & Revenue post. Include both active and inactive projects. Check the Billing & Revenue summary for draft invoices.
Direct Labor – If your labor does not match:
☐ The Cost Report Setup is Missing a Labor Cost Element.
If labor is missing from the cost report, check that all labor cost elements are included in the cost report definition (Admin > Setup > Cost Reports). Check the direct labor account for labor that may have posted from an indirect project.
☐ An Incorrect GL Account Was Used.
If labor is missing from the Income Statement, check the posting logic to see if the labor was posted to the incorrect GL account. Is the project associated with the correct Posting Group (Project > Accounting)? Depending on which are selected in the Posting Group (Admin > Setup > Posting Groups), labor cost posting accounts can check (in order) Person, Cost Element, Labor Category, Employee Type, Task, Project, Project Type, Pay Code, Legal Entity, Posting Group Override.
☐ Labor Was Misclassified as Non-Billable (or Billable).
A project or task with a non-billable project type can classify labor/expenses as non-billable (which may be separated out on the project Cost Reports), but the posting logic may still post the cost to the same place as the billable labor.
☐ Journal Entries Were Entered for Direct Labor.
If labor is missing from the cost report, review the transactions in the GL Detail and determine if there are journal entries. Project labor is recorded through Labor Cost (LC) Posts. Ideally, this should be the only method to record labor transactions.
Direct Non-Labor – If your non-labor expenses do not match:
☐ Expense Mapping Is Incorrect.
- Your expense type/cost element mapping may be wrong. Check the expense type’s cost element (Admin > Setup > Cost Structures > ODC). In some situations, Unanet may be able to run a script to re-map these.
- The expense type may be mapped to a single GL code instead of by Project Type. Unless there is intentionally one GL account for all project types (e.g., unallowable), ensure that Cost Accounts are defined by Project Type.
- Indirect accounts are mapped to direct Project Types. Check the Project Type account mapping and make sure indirect account numbers are not mapped to direct Project Types (or vice versa).
- To fix existing postings, do a $0 Journal entry and debit and credit to the correct expense types. The accounts, orgs, projects, and tasks all remain the same.
☐ Expense Mapping is Missing.
Expense types are not mapped to a cost element. In this case, include all “Unmapped” costs in a Cost Report to check for this error.
☐ Projects are Missing from Postings.
- An AP invoice was posted without a project. To help avoid this, all direct cost accounts should be marked to require projects.
- A journal entry was posted without a project and expense type. This can also be avoided by requiring projects on all direct cost accounts.
☐ Cost Structure Missing from Project Setup.
Projects not associated with a cost structure will not show up on project accounting reports. This is under the Accounting tab of the Project setup. Make sure it is selected in the drop down for direct projects. In most situations, leave this blank for Indirect projects.
☐ Indirect Rates are Not Posted or Need to be Updated.
The Cost Pool Calculation needs to be posted before running the project report. To do so, Under General Ledger > Cost Pool Calculation, run the calculation, and post the rates. Review the indirect rate report. You should see only non-allocated unallowable costs in the “Not Used” column.
Indirect Expense Report to Income Statement
After posting the Cost Pool Calculation for the month, run the Statement of Indirect Rates. You should not see a balance in the column titled “Not Used” except for G&A unallowable costs.
If you do not reconcile:
☐ Changes to Expense Accounts Were Made After Cost Pool Calculation.
The number one culprit is that changes were made to expenses in the GL after the Cost Pool Calculation. In this case, you will need to void the Cost Pool Calculation and repost.
☐ New GL Accounts Were Added.
If you added a new GL account, check that you assigned it a Cost Pool Parent under the account setup. Also, do a quick check that:
G&A Pool Cost + G&A Base + M&S Base (if applicable) from the Indirect Expense Report = Total Direct Cost + Total Indirect Cost from the Income Statement
If you are still unsure how your Unanet entries are impacting reconciliations, download our checklist here, or call for backup. CAVU Advisors is a Unanet Reseller Partner, Services Partner, and Outsourced Accounting Partner. We would be happy to assist with any questions you have regarding Unanet.