In this article
Key takeaways
- Reconcile individual items, customer and supplier accounts and general-ledger balances.
- Include unallocated payments and credits in the reconciliation.
- Use original due dates to distinguish overdue from merely unpaid.
- Investigate old residuals before treating them as differences to write off.
Build the customer account at a fixed date
At 30 September, one customer has these items. Amounts are gross settlement values; VAT treatment is outside this calculation.
| Item | Original amount | Allocated payment or correction | Open amount |
|---|---|---|---|
| R-201, due 15 September | €1,200 | €800 payment | €400 |
| R-202, due 15 October | €600 | None | €600 |
| R-203, due 30 September | €350 | €50 correction | €300 |
| Receipt awaiting allocation | −€300 | None | −€300 |
| Customer account balance | €1,000 receivable |
The open invoices total €1,300. The known customer receipt reduces the account balance to €1,000, even before it is allocated to a particular invoice.
If the collection list includes only invoices, it overstates the amount still to be collected by €300. If the ledger has no record of the receipt, the bank or customer posting is incomplete. Those are different errors.
Resolve the unallocated receipt
The customer’s remittance advice identifies R-203. Allocate the €300 receipt to its remaining €300 balance.
R-203 is then fully settled: €350 invoice − €50 correction − €300 payment = €0. The unallocated receipt also becomes zero. R-201 remains €400 open; R-202 remains €600 open. Their sum is the unchanged €1,000 customer account balance.
No new revenue or cash movement arises from this allocation. It changes which invoice is outstanding. At the review date, R-201 is overdue; R-202 is not yet due. Sending a reminder for R-202 would be premature under the stated terms.
Reconcile the population as well as the total
For the customer and supplier ledgers separately:
- Use the same reporting date, currency and posting scope.
- Sum the individual open items, including credits and unallocated payments.
- Compare that sum with the corresponding subledger-account balances.
- Compare the subledger-account totals with the relevant control accounts.
- Explain differences individually, including opening data and direct postings.
A direct posting to a control account can make the general ledger differ from the open-item list. A missing opening invoice can produce a credible account balance without a usable list of what is owed. Do not assume an imported opening balance contains invoice-level open items.
Do not net unrelated customer and supplier balances merely because the amounts match. Even within one counterparty, an apparent offset needs the appropriate underlying basis and allocation.
Read old items as questions with evidence
| Residual item | First investigation |
|---|---|
| Small amount after payment | Agreed discount, bank fee, rounding, disputed deduction or genuine underpayment? |
| Old invoice despite a familiar bank receipt | Wrong invoice, wrong personal account or unallocated payment? |
| Supplier credit with no movement | Refund expected, future offset agreed or missing allocation? |
| Unusually old customer invoice | Dispute, collectability issue, missing correction or failed payment? |
A small balance is not automatically rounding. For example, €23.80 could be a documented 2% discount on €1,190. Without the terms and payment facts, treating it as a discount would be a guess.
Ageing helps select what to investigate; it does not by itself determine valuation or tax treatment. Keep the conclusion and supporting evidence with the item.
Make the list useful for next month
Give each unresolved item one reason, one next action and a follow-up date. “€400 on R-201; customer disputes delivery; signed delivery note requested by 8 October” is actionable. “Clarify customer” is not.
Hans connects invoices, credits, partial payments and settlements. The firm’s check remains whether the correct items explain the balance and whether unresolved amounts have a justified next step.
For more allocation examples, see one payment, several invoices. For identity problems, see the same brand with a different legal supplier.
Sources
Sources were checked on 06 October 2026. This article provides orientation and is not tax, legal, or accounting advice.
- German Commercial Code section 238 – bookkeeping duty
- German Commercial Code section 266 – balance-sheet structure
- Published