Reviewing the Books: Tie-outs and Cut-off

Tie the sub-ledgers, test the cut-off and check the entries no document raises

Steps 2 to 4 of Reviewing a Set of Books: the checks BigLedger does not do for you. You tie each balance-sheet total to the list behind it, test that the year’s transactions sit in the year, and check the entries that only a person can post. It follows Step 1, where the trial balance was proved. The examples use GadgetSphere’s group of three companies: GadgetSphere Sdn Bhd (GS, 22 retail branches), GadgetSphere Online Sdn Bhd (GSO) and GadgetSphere Distribution Sdn Bhd (GSD, wholesale to corporate customers), whose financial year ends on 31 December 2026. Check Before you start first: it lists what you need in hand, and why an auditor should be given read access only.

Step 2: tie every sub-ledger to its control account.
Step 3: test the cut-off.
Step 4: check the entries that no document raises.

Step 2: Tie every sub-ledger to its control account

The outcome: each balance-sheet total that has a detailed list behind it agrees with that list, or every difference has a named reason.

This is the heart of the review, and BigLedger does not do it for you. The customer aging is built from documents. The receivables control account on the Balance Sheet is built from journals. They are two separate records of the same money, and there is no screen that compares them document by document: the Debtor Report shows one document’s own journal on its Journal Txn tab, one document at a time, and nothing lists the journal lines that have no document behind them. So the comparison is a person’s job, done every month before the month is locked, and repeated at the year end for the auditors.

Tie-out	Left side	Right side	Where a difference comes from
Receivables	Debtor Report > Aging Report, all customers, as at 31 December	`DEBTOR-TRADE-RETAIL` and the other receivable control accounts on the Trial Balance	A manual journal posted straight to the control account (an opening correction, a write-off done by journal, a rounding entry). It moves the ledger and can never appear on the aging, because there is no document to age
Payables	Creditor Report > Aging Report, as at 31 December	`LIAB-SUPPLIER-TRADE`	The same, plus a supplier document keyed against the wrong group company
Bank	The bank statement closing balance	Bank Reconciliation Report 1 for `CASH-PRI-KV01`, variance line	Items not yet presented, items not yet recorded, items recorded twice, or an error
Cashbook to ledger	Cashbook > Cash Level, Closing column, with From set before the cashbook’s first transaction and To on 31 December. Cash Level opens at today → today and lists only cashbooks that moved in the range, so count its rows against the Cashbook listing before you start: a cashbook with no row is not tied (why)	The cashbook’s GL code on the Trial Balance	A manual journal to the bank GL code: it moves the ledger and writes no cashbook line. Or sales whose payment method had no cashbook when they were finalised, once their journals were rebuilt: the journal is back and the cashbook line is not. The Data Fix applet’s Cashbook › Missing Cashbook tab lists those documents by date and writes their cashbook lines
Output tax	The SST-02 for the last taxable period. On a service-tax return, item 12 (the tax). On a sales-tax return, the tax amounts in items 11a and 11b, because BigLedger’s item 12 on that form adds the taxable amounts instead	`LIAB-SST-OUTPUT`	Three differences to expect, each with its own line on the sheet. Credit notes not filed in the cycle: a credit note you file is already inside the return. Filing writes its taxed lines with negative amounts, and items 11 and 12 add up every filed line of the cycle, whatever the document, so the return and the ledger agree on it. BigLedger leaves the deductions box (item 13) empty. Do not also enter a filed credit note there, or the tax is deducted twice. The difference to expect is a credit note that reduced the ledger but is not on the cycle’s Filed Transactions tab. Whether Customs wants a credit note netted into item 11 or shown in item 13 is a question for the tax agent. Either way it is counted once. Unpaid service invoices: service tax is filed in the period the customer pays, and the ledger records it when the invoice is finalised. Changes after filing: filing copies the taxed lines into a frozen record, and the ledger stays live. Anything else, such as a manual journal to the account, is a finding
Input tax	The SST Tax Code Summary for the same filing cycle, input tax column	The input-tax account on the Trial Balance (a purchase invoice posts its tax there)	A purchase document never filed in the cycle is a difference. Treat the summary with care: it adds up today’s amounts on each document line once for every time that line was filed in the cycle, and it still counts a filing that was later undone. So a purchase line unfiled and filed again counts twice, and a document you unfiled can still be in it. If the summary is higher than the ledger, look for lines filed more than once on the cycle’s Filed Transactions tab before you call it missing tax. Beyond the tie-out, ask what the balance is. SST has no general credit for tax paid on purchases, as GST did, and BigLedger’s SST-02 has no box that takes it. So this balance is not money Customs owes you. Your tax agent says what part, if any, may be deducted, and the rest is moved to cost

Who ties which. At GS the receivables clerk ties receivables, the payables clerk ties payables, the cashbook clerk ties the bank and cashbook lines, and the senior accountant ties both tax lines. They do it in the first three working days of the next month, before the month is locked, and the finance manager initials the sheet.

Record each tie-out on one sheet: both figures, the difference, and a line for each reconciling item with its document or journal reference. That sheet is what the auditor will ask for.

Finding a receivables or payables difference line by line. No screen compares the two record by record, so work from the ledger side. On the Trial Balance, click the control account. The drill-down lists its lines with Doc Type, Doc No and Entity. Every line with no document type is a journal somebody keyed, and the aging can never show it. List those lines, then look each one up on the Journal Transaction listing for its Created By and Created Date. If they do not add up to the whole difference, compare each customer’s balance on the aging with that customer’s lines in the drill-down: the rest is a document posted to the wrong control account or dated in another period. The clerk doing the tie-out does this. You know it is finished when the listed lines add up to the difference to the cent.

When one will not come out, stop. Quantify the difference, write down what you have ruled out, and hand it to the finance manager with a date. Do not post a balancing journal to make it agree. A plug hides the error in a place nobody will look, and next year’s reviewer inherits a difference that nobody can explain. An unexplained RM 1,240 on the receivables tie-out, documented and escalated, is a finding. The same RM 1,240 plugged to sundry expenses is a concealed one.

How you know you got it right: every line of the tie-out sheet reads zero, or carries a reference that the finance manager has initialled.

Step 3: Test the cut-off

The outcome: sales, purchases and costs for the year are in the year, and nothing from January 2027 has leaked back.

BigLedger puts every document in the period of its transaction date. It does not compare that date with anything else, such as the delivery date or the date the supplier’s bill arrived. Deciding which period an event belongs to is the accounts team’s job. Testing that they decided correctly is yours.

Finance > Debtor Report > AR Transaction, then the same on the Creditor Report, for 24 December 2026 to 10 January 2027.

Three situations to look for:

Goods delivered on 31 December and invoiced on 2 January. The sale belongs to December. If GSD’s corporate delivery went out on the 31st and the invoice is dated 2 January, December’s revenue and receivables are understated. The accounts team either dates the invoice 31 December (if December is still open) or accrues the sale by journal in December and reverses it in January.
A supplier’s bill that arrives in January for goods received in December. If the goods came in on a Purchase GRN Stock In, the goods-received accrual was posted in December when the GRN was finalised, so the liability is already in the year. If they came in on a plain GRN, which posts nothing, the liability is missing from December until somebody accrues it.
A void in January of a December document. The reversing journal carries the original December date. Voiding a December invoice in January changes December, even if December’s statements have already gone to the auditors. So once a month’s statements have gone out, nobody voids a document dated in that month without the finance manager agreeing first. At the next month-end, the check in Step 4 of Who May Change the Books finds any void that slipped through: its reversing journal carries December’s transaction date and a January created date. If December’s figures moved, the finance manager re-issues the statements and tells whoever received them what changed.

For a late supplier bill there are three honest choices, and the finance manager makes the choice, not the clerk: post it in December if December is still open, accrue it by journal in December and let the bill post in January, or post it in January and record why the amount is too small to matter. Each is defensible. Silently dating it into whichever month is open is not.

How you know you got it right: every document in your window over RM 5,000 has been read against its delivery note or goods received note, and the period it sits in matches the period of the event.

Step 4: Check the entries that no document raises

The outcome: every adjustment the year needs is posted, authorised and supported.

Nothing in BigLedger posts an entry that the calendar causes rather than a document. Depreciation, accruals, prepayments, provisions for doubtful debts and year-end bonuses all appear in the ledger only if a person keys them as a manual journal. The depreciation run in the Fixed Asset applet posts nothing today: on the build served (checked 7 October 2026) its RUN button does nothing (Financial Accounting Module), so depreciation is a manual journal too.

Finance > Ledger and Journal > Journal Transaction, with the Type column showing MANUAL, for the year.

For GS, the list should include twelve depreciation journals, the month-end accruals, and the year-end provisions. For each one, read the description and ask for the support: the calculation, the invoice, the approval. A manual journal with no description, or one described only as “adjustment”, is a finding.

Somebody has to own the list of entries the calendar causes, because no document will prompt them. At GS the senior accountant keeps a standing month-end list: depreciation for each asset class, each recurring accrual and prepayment, and the provision review. By the third working day of each month they key the journals and write each Journal No against its line. The finance manager reads the list against the MANUAL journals on the listing before the month is locked. The list is complete when every line has a Journal No, or a written reason why nothing was needed that month.

A provision is not a write-off, and the difference shows in the aging.

A write-off says the debt is gone. It is done with a credit note on the customer’s account, so the customer’s balance and the aging both fall. It is approved by the finance manager before it is posted.
A provision says the debt may not be collected. It is a journal to an allowance account (for example DEBTOR-ALLOWANCE), and it leaves the customer’s balance and the aging untouched, because the customer still owes the money and you are still chasing it.

Post a provision to its own allowance account, never to DEBTOR-TRADE-RETAIL itself. A journal straight to the control account is exactly the difference Step 2 finds, and next year’s reviewer will spend a morning finding it again.

How you know you got it right: every manual journal over RM 5,000 has a description, a supporting document and the name of whoever approved it, written down outside BigLedger if nowhere else.

Next: Steps 5 to 7, retained earnings, the group and the sample.

What success looks like for this part

Every line of your tie-out sheet is zero or carries a named reason, the cut-off test found nothing in the wrong year or lists the correction, and every manual entry the year needs is posted with its support filed.

Common mistakes in this part

Mistake	What you see	What to do instead
Plugging a tie-out difference	A tie-out that agrees this year and an unexplained balance on a sundry account next year	Quantify, document and escalate (Step 2)