In the context of reconciliation, Groups refers to situations where two or more debtors (or creditors) belong to the same legal entity but appear separately on the ledger.
Although they represent a single legal entity, they are listed as multiple accounts within the accounting system.
Why does this happen?
This typically occurs when:
- The same customer or supplier has been set up more than once in the accounting package
- Different trading names, branches, or reference codes are used for the same legal entity
- Historical or legacy accounts have not been merged
As a result, the ledger shows multiple entries even though they relate to one legal entity.
How are Groups used in reconciliation?
During reconciliation, Groups allow you to:
- Combine multiple ledger entries that belong to the same legal entity
- Review balances collectively rather than individually
- Ensure the reconciliation reflects the true overall position of that entity
This helps prevent discrepancies caused by split balances across separate ledger accounts.
Example
A single legal entity may appear on the ledger as:
- ABC Ltd – Head Office
- ABC Entertainment Ltd – Branch A
Even though these appear as separate debtors, they can be grouped together during reconciliation to represent ABC Ltd as one entity.