The backbone of a computerized accounting system is the access to immediate reporting on customer and vendor balances. A good system allows you to control the reporting on both customer and vendor aged balances by the selection of cutoff dates. You should be able to reconstruct aging reports from previous periods and prior years as far back as necessary. A good system will accommodate this by allowing you to select how far back you retain paid-up invoices.
In an audit, it is not enough to be able to show the A/R or A/P balance in a GL Trial Balance. You may also be required to show the detail of invoices still open until the end of the selected GL period to validate the GL figures. Most businesses will keep no more than a year of paid invoices in case it is required to reconstruct earlier Aging Reports. Relying on a hard copy or PDF version of a aging report at the time the given month is closed may not be enough. Why? Because sometimes back posting of adjustments to earlier balances may make these “closed” reports obsolete.
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