The sales team raises invoices in a billing or accounts receivable (AR) system. The accountant closes the month in the ERP. On the last day, the list of what customers owe in one does not equal the receivables figure in the other, and the difference has to be hunted down invoice by invoice. The cure is not a better export. It is one chart of accounts that both systems obey.
Why the numbers disagree
- An account opened in the AR system only, so its entries have nowhere to land in the ledger.
- The same customer created twice, once in each system, under different codes.
- Invoices edited in one system after they were sent to the other.
- Tax rounded differently on each side.
- A journal posted straight to receivables in the ledger, which the AR system never sees.
Three ways to connect AR and the ERP
| Method | How it works | Suits |
|---|---|---|
| Entry by entry | Every invoice, receipt and credit note crosses as its own posting | Businesses that want to trace any figure back to its document |
| Daily summary | One journal a day for each account, with the detail kept in the AR system | High volumes of small invoices |
| AR inside the ERP | Invoices and receipts are raised in the ERP itself, so nothing crosses | Companies whose AR system cannot share data reliably |
Pick one method and keep to it. Detail on some days and summaries on others is how a reconciliation becomes impossible.
The mapping table
The table lists every account the AR system uses and the one ledger code it points to. Your accountant writes it and signs it. The developer builds exactly what it says.
| In the AR system | Points to in the ERP ledger |
|---|---|
| Customer invoices | Receivables control account |
| Sales by product or service line | The matching revenue accounts |
| Sales tax or VAT charged | Tax payable |
| Discounts and credit notes | Discounts allowed, or sales returns |
| Receipts | The bank or cash account they were paid into |
| Receipts not yet matched to an invoice | Unapplied receipts |
| Advances from customers | Customer advances |
Six steps to sync the two
Choose one master chart
The ERP's general ledger is normally the master. New accounts are created there and copied to the AR system, never the other way round.
Map each AR account to a ledger code
Use the mapping table above, one code for each account, and have your accountant sign it off before anything is built.
Match customers before balances
The same customer must carry the same code on both sides, or invoices post to the wrong party.
Decide what crosses over
Every invoice and receipt as its own entry, or one summary journal a day for each account. Detail is easier to trace and summaries are lighter.
Lock the mapping
One person may add or change an account, and a change on one side does not go live until it exists on the other.
Reconcile every month
The total of open customer balances in the AR system should equal the receivables control account in the ERP. A difference means something was posted on one side only.
The monthly proof
On the last day of the month, print two figures: the total of open customer balances in the AR system, and the balance of the receivables control account in the ERP. They should be equal. If they are not, check four things in this order: entries posted directly to the control account, invoices or receipts that failed to cross, items dated on different sides of the month-end, and accounts or customers that exist in one system only. Fix the cause before the month is closed, or the same difference comes back next month, larger.
Tax codes travel with the accounts
The chart is not the only list that has to match. Tax codes need the same meaning on both sides: sales tax in Pakistan, or 5% VAT in the UAE. If the AR system calls a rate one thing and the ERP another, the tax report from each will differ even when every invoice crossed correctly. Your accountant decides the treatment. For the UAE, see UAE VAT in your ERP and POS.
Payables work the same way: the supplier ledger takes the place of the customer ledger, and a payables control account takes the place of receivables.
When to stop syncing
If the AR system cannot accept accounts from outside, or cannot hand over its postings cleanly, the link will need constant repair. Raising invoices and receipts in the ERP removes the sync altogether. How to integrate accounting software with ERP compares the two routes, and ERP financial management shows how the accounts side of an ERP posts on its own.
Our ERP software includes an accounts module or connects to the package you have, and the Sea Keepers ERP shows finance per order. Book a demo and bring your chart of accounts.
Questions people ask
How do I sync the chart of accounts between an AR system and an ERP?
Make the ERP's ledger the one master chart, map every account the AR system uses to a ledger code in a table your accountant signs off, and allow new accounts to be created in the master only. Then check each month that open customer balances in the AR system equal the receivables control account in the ERP.
Which chart of accounts should be the master?
The ERP's general ledger, in nearly every case, because the trial balance and the tax returns come from it. The AR system receives accounts and never creates them.
Should invoices cross one by one or as a daily total?
Either works. Entry by entry is easier to trace, and a daily summary is lighter for high volumes. Choose one method and do not mix them.
How often should AR and the ERP be reconciled?
At least monthly, before the period is closed. Open customer balances in the AR system should equal the receivables control account in the ERP.
Is it simpler to keep receivables inside the ERP?
Often, yes. When invoices and receipts are raised in the ERP there is nothing to sync. It is the better route when the AR system cannot share data reliably.
