The AP Subledger is Not a Suggestion: Reconciling Payables Like a Pro

“I asked my son what reconciliation meant to him. He said it’s when he says sorry before I check the Xbox history.”

— Me, just trying to close the month and survive parenthood.

If you're anything like me, you’ve stared at a vendor trial balance in Dynamics 365 Finance & Operations, then flipped to the GL and muttered something like, “Why do these never match?”  Don't worry, you’re not alone. Reconciliation between Accounts Payable and the General Ledger is one of those things that sounds straightforward until... it isn’t.

So let’s break it down Dad-style. Not because it's simple, but because life’s too short to be lost in ledger lines.

Why Vendor Balances in the GL Don’t Match the Subledger

In a perfect world, your AP subledger and GL are synchronized like a boy band dance routine. But reality? It’s more like a toddler talent show. Cute, chaotic, and full of surprises.

Here are the biggest culprits behind mismatches:

• Manual journal entries to vendor summary accounts: If someone manually posts to the AP summary account (usually a 200000-type account) without going through the vendor module, that entry never hits the subledger.

• Wrong posting profiles: An incorrectly configured posting profile can route AP transactions to the wrong GL accounts or even skip the vendor ledger entirely.

• Posting errors or failed transactions: If a transaction fails mid-post or gets stuck in batch jobs, your GL and subledger might each think they're telling the truth, but they’re talking about different things.

• Timing issues: Cutoff dates matter. If your subledger has activity after the GL cutoff date, or vice versa, you’ll be chasing your tail during close.

How to Reconcile and Prevent Divergence

Like flossing, reconciliation should be regular. Not just something you attempt the night before the audit.

Here’s the pro-level AP reconciliation checklist in D365:

1. Lock down your posting profiles: Make sure your Accounts Payable summary account is only touched through the vendor module. Use account structures and rules to stop rogue journal entries.

2. Reconcile weekly, not just monthly: The earlier you catch divergence, the less painful month-end becomes.

3. Use the "Vendor Balance List" and "Voucher Transactions" reports: These two work like a magnifying glass and flashlight for your AP jungle. The balance list shows who you owe. The voucher report tells you how those numbers got there.

4. Leverage financial dimensions consistently: Inconsistent dimension usage can make reconciliation across business units, legal entities, or departments almost impossible. Set defaults and enforce policies.

5. Run the "Reconciliation Report – Vendor": This built-in report (Accounts Payable > Inquiries and reports > Reconciliation reports > Reconciliation report – vendor) shows you which transactions hit both the subledger and the GL, and flags any differences.

Use of Settlements, Voucher Tracking, and Aging Tools

Dynamics 365 F&O gives you some powerful features here, but only if you know how to wield them.

• Settlements: The settlement process is what ties invoices and payments together. If settlements aren’t posted correctly or reversed without care, you’ll see vendors with weird open balances that look wrong, even if they technically balance.

• Voucher tracking: You can track a single voucher from invoice to payment to ledger. Drill into transactions from the Vendor > Transactions screen and follow it all the way to the posted GL. It’s the breadcrumb trail for every payment mystery.

• Aging reports: The aging snapshot gives you an up-to-date view of outstanding AP balances. It’s also your best friend when someone says, “I think we already paid that invoice.” Spoiler: They didn’t..

Reconciling AP isn’t optional. It’s not a bonus task or a "nice to have." It’s the lifeline that keeps your financial statements grounded in reality.

In Dynamics 365 F&O, treating the AP subledger as a suggestion is like ignoring your check engine light because the car still moves. Eventually, the engine (or in this case, your close process) will come to a grinding halt.

So crack open that Reconciliation report, trace your vouchers like a detective on a deadline, and don’t forget, your future self will thank you when that audit comes knocking.

And hey, if all else fails, just blame it on the Xbox.

DynamicsDad