Why Does the Client’s Balance in Reports Differ from the Net Result of Invoices Minus Payments?

This guide covers the cases in which a client’s balance appears in reports with a value different from the expected result of subtracting the total payments from the total invoices during a specific period, and explains how the balance is calculated in each report, and the steps to reconcile the balance and determine the cause of the difference.

An Illustrative Example

When extracting a report for one of the clients, say “Example Trading Company,” for the period from September 1 to September 30, the following data appeared:

Item	Amount
Total invoices issued during the period	50,000
Total payments during the period	40,000
The expected balance (50,000 − 40,000)	10,000
The balance shown in the report	8,500
The difference	1,500

The result of subtracting payments from invoices isn’t the client’s balance, since the balance shown in reports includes, in addition to the period’s invoices and payments, the following items:

1. The client’s balance before the start of the period (the beginning-of-period balance).
2. Refund invoices and credit notes issued during the period.
3. Other movements recorded on the client’s account, such as the opening balance, manual entries, received cheques, advance payment settlements, and point of sale sessions.

Since the balance shown in the report is less than the expected result by 1,500, this indicates amounts in the client’s favor of the same value, and this is usually due to one of the following reasons:

Possible Cause	How It Appears
The client had a credit balance before the start of the period (an overpaid amount, an advance payment, or a negative opening balance)	The beginning-of-period balance appears as −1,500
A refund invoice or credit note was issued during the period	A refund or credit note line appears among the period’s movements
A received cheque, a manual entry, or an advance payment settlement was recorded on the client’s account	An entry line appears among the movements, and doesn’t appear as a payment on the invoice

The correct formula for calculating the balance is: beginning-of-period balance + invoices − payments − returns and credit notes ± other movements = end-of-period balance. If the beginning-of-period balance is −1,500, the balance is: −1,500 + 50,000 − 40,000 = 8,500, which is the balance shown in the report.

How the Balance Is Calculated in Each Report

Report	Basis of Calculation	Notes
Account Movement (a tab in the client page)	Invoices, payments, returns, notes, and the client account entries	Starts with the Beginning-of-Period Balance line and ends with the End-of-Period Balance line, and it is the most suitable report for reconciliation.
Account Statement (a button in the client page)	The same movements	Doesn’t include a date filter, and shows the cumulative balance from the start until today’s date.
Client Balances	The accounting entries recorded on the client’s account	Shows the balance in detail in the following columns: Balance Before, Total Sales, Total Returns, Net Sales, Total Payments, Adjustments, Balance.
Clients Account Statement (within the sales reports)	The accounting entries	Starts with the Balance Before line, shows all the entries recorded on the client’s account, and requires the permission to view entries.
Client Sales	Invoices according to the invoice date	Shows sales only, and doesn’t show the balance.
Client Payments	Payments according to the payment date	Shows payments only, and doesn’t include received cheques.
Debt Aging (Ledger)	The balance of entries up to a specific date	Shows the total balance distributed over the delay periods.
Debt Aging (Invoices)	The amount currently remaining on each invoice	Depends on the current status of the invoices, not on a past date.

Steps to Reconcile the Balance

Step One: Review the Account Movement for the Period

1. Open the client page, then go to the Account Movement tab.
2. Set Period From 1/9 To 30/9, then enable the Show Details option.
3. Review the first line Beginning-of-Period Balance; if its value is −1,500, the cause of the difference is a balance in the client’s favor before the start of the period.

Step Two: Review the Client Balances Report

If the beginning-of-period balance is zero, follow this:

1. Open the Client Balances report.
2. Choose the client, the period from 1/9 to 30/9, select all branches, then enable the View Details option.
3. Compare the columns as follows:
   • The Total Sales column should equal 50,000.
   • The Total Payments column should equal 40,000.
   • Any amount that appears in the Total Returns, Adjustments, or Balance Before column represents the cause of the difference.
4. Verify that: Balance = Balance Before + Net Sales − Total Payments + Adjustments.

Step Three: Review the Details of the Differing Amount

If an amount appears in the Adjustments or Balance Before column, open the Clients Account Statement report from the sales reports for the same period, and look for the line whose value is 1,500; each line is linked to the accounting entry and its source.

Other Causes of Balance Differences

Cause	Explanation
Previous Balance	The client’s balance before the start of the period, or the opening balance recorded for them.
Returns and Credit Notes	They reduce the balance, and don’t appear in the payments report.
Date Differences	A payment recorded during the period on an invoice issued in a previous period (or vice versa) is counted within the period’s payments without its invoice being counted within its sales.
Received Cheques	A cheque added from Received Cheques is recorded on the client’s account directly, and doesn’t appear as a payment on the invoice or in the client payments report, so the invoice stays “unpaid” even though the balance decreased.
Advance Payments and Credit Balance	Payment from the client’s balance doesn’t appear as a new payment in the payments report.
Incomplete Payments	Payments whose status is “Under Review” or “Failed” aren’t counted in any of the reports.
Draft and Deleted Invoices	They aren’t counted in the reports.
Manual Entries	Any manual entry recorded on the client’s account affects their balance without appearing within the invoices or payments.
Point of Sale	If the entry is calculated per session, the session’s invoices don’t appear in the entry-based reports until the session closing is confirmed, and they are recorded with the closing date.
Currencies	The entry-based reports convert amounts at the exchange rate on the entry date, while the client sales and client payments reports convert amounts at today’s exchange rate when all currencies are chosen.
Branches	The same branch, or all branches, must be chosen in all the reports being compared.
Recording on Another Client	Recording an invoice or payment on an incorrect client.

Recommendations to Avoid Confusion

• When calculating a client’s balance for a specific period, it is recommended to always start from the beginning-of-period balance.
• A direct comparison between the Client Sales report and the Client Balances report isn’t valid; the first shows sales only, while the second shows the full balance.
• It is recommended to record collection as a payment on the invoice, or to record cheques from the cheque cycle with the invoice number in the description, to ensure the invoices’ status matches the client’s balance.

Frequently Asked Questions

Which is the correct balance: the manual calculation or the report?

The balance shown in the report represents the client’s actual balance, because it includes all movements, while the manual calculation is limited to the period’s movements only.

Why do all the invoices appear unpaid while the client’s balance is low?

This is usually due to recording the collection through received cheques or manual entries on the client’s account, instead of recording the payments on the invoices.

Why does the account statement balance differ from the period balance?

The account statement shows the cumulative balance up to today’s date, while the account movement limited to a period shows the ending balance of that period.