Wasatch Economics

Here’s why:  when AP or AR transactions are performed by users, the system automatically creates journal entries in the appropriate general ledger accounts.  At the end of any time period (day, week, or month), the report listing the balance of AP invoices will match the amount in the corresponding general ledger account recording the balance of accounts payable outstanding.

If a manual journal entry is made to the general ledger account then the AP summary report (the one that lists the balance of AP invoices outstanding) total will not match the balance in the general ledger account.  That’s bad…it defeats the purpose of having a report that summarizes AP; as you will have to dig into the general ledger detail to find out the reason for the variance, later.