Course Objectives This course consists of two primary objectives To inform reconcilers of the resources available to perform a proper reconciliation 2 To provide guidance on completing the ID: 253721
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Slide1
Account Reconciliation TrainingSlide2
Course
Objectives
This course consists of two primary objectives:
To
inform reconcilers of
the
resources
available to
perform a proper
reconciliation.
2. To
provide
guidance on completing the
account reconciliation.Slide3
What is an account reconciliation?
Process
of
comparing
information
A
nalyzing
differences
Making
corrections
Consistent
dataSlide4
Why reconcile
your department account?
Ensure the account is correctly charged for all expense and encumbrances
Ensure that all revenue is recorded (as applicable)
Ensure
the
accuracy
and
completeness
of transactions
Ensure errors
or discrepancies noted during the reconciliation process
are correctedSlide5
Accuracy and Completeness includes a review of the entries to insure that they are:
Appropriately
classified to the account
,
Authorized
in accordance with University policies, State and Federal laws and regulations, and specific sponsor or donor requirements or
restrictions,Slide6
Accuracy and Completeness includes a review of the entries to insure that they are:
Within
the guidelines of the stated purpose of the
account and
Have
matching dollar values for each transaction between
SAP and your department’s records.Slide7
Who should prepare account reconciliations?
UPPS No. 03.04.02
.
The
account manager or designee must regularly reconcile budget and financial transactions in university financial systems with the transactions’ corresponding source documents.
If possible, reconciliations should be
prepared by the department’s support staff, but reviewed and approved by the account manager
for proper
segregation of
duties. Slide8
When should account reconciliations be prepared?
Departmental
account reconciliations should be prepared
monthly
.
All postings in SAP will be complete by the 10
th
of the following month, with the exception of Restricted funds. Slide9
Where
should account reconciliations be kept?
Evidence of reconciliation, and its completion, along with supporting documentation, should be
maintained in
department offices.Slide10
How long should account reconciliations and support documentation be retained by the department?
Per University’s Retention Schedule for Financial Documents:
Fiscal Year End + 3Slide11
Types of Transactions
Budget changes and carryforwards
Encumbrance transactions
Expenditure transactions
Revenue transactions
The department should maintain support documentation for each of these types of
transactions for reconciling purposes.Slide12
What is Support Documentation?
Budget changes and carryforwards – budget change forms, or documentation of budget at beginning of fiscal year
Encumbrances – small purchase orders, departmental purchase requisitions, purchase orders, travel applications, etc.
Expenditures
– invoices, report of phone charges, packing slips, travel vouchers, receipts, etc.
Revenue
– deposit receipts, etc.Slide13
What reports should I use in SAP to reconcile our department’s account(s)
The suggested beginning point for any reconciliation should be the Budget to Actual Report in SAP (Transaction Code: ZBUDACT)
The
Budget to Actual Report provides
a summary
of the
account:
It
summarizes the budget
balance,
how
much has been spent from the account,
how
much revenue has been taken in,
how
much has been encumbered
and
the available balance. Slide14
Refer to the Budget Office’s training document
http
://www.fss.txstate.edu/budget/training/how-to-and-reference
How To Instructions for Budget to Actual Report:Slide15
Where can I obtain Line Item Detail without drilling down into each Commitment Item on the Budget to Actual Report?
Line Item Detail can be obtained from
:
All
Postings Report
Transaction
Code:
ZFMRP_RFFMEP1AXSlide16
Refer to the Budget Office’s training document
http://www.fss.txstate.edu/budget/training/how-to-and-referenceSlide17
Let’s Reconcile!Slide18
Step 1 –
Gather Source Documents and Prior Month’s Reconciliation (i.e. transactions you initiated in the past month)
Make it a habit to track transactions in an Excel Spreadsheet because it:
Helps eliminate accidental omission of account activity
Provides an up to the minute budget balance
Makes the reconciliation process easier to completeSlide19Slide20
Step 2 – Check Beginning Balances
The reconciler must verify that the
beginning
revenue/expense
totals
match
to the
prior
month ending amounts
. Run the Budget to Actual report in SAP to confirm balances.Slide21Slide22Slide23
Step 3 – Current Period Activity
In SAP, run All Postings for applicable period.
(Transaction Code:
Z
FMRP_RFFMEP1AX
)
Subtotal results by Reference Document number to obtain totals by invoice, journal entry, etc.Slide24Slide25
SAP-ALL POSTINGS
ZFMRP_RFFMEP1AX
Results have been filtered to include Invoices and Profit Transfer Postings only. Results then subtotaled by Period/Year and Reference Document Number, providing totals for each transaction, each month and cumulatively.Slide26
Step 4 - Compare SAP current period records to department’s records
For visual ease, check off items in the SAP report and
matching department
record.
Add the month cleared, document number and dollar amount paid in the columns to the right of your running balance on the Department’s Excel Record. The unchecked items on both set of records represent your reconciling items.Slide27Slide28
Step 5 – Investigate each Reconciling Item
Reconciling
items may or may not require
adjustments
in accounting records.Slide29
Reconciling ItemsSlide30
Common Reconciling Items
Timing Differences
$ Amounts are different
Incorrectly Coded Items
Missing ItemsSlide31
Timing Differences
Identify
prior month timing differences which posted in the
current period
.
These are no longer reconciling.
Identify current period items expected to clear in the following month due to timing differences.
These ARE reconciling items.Slide32
Timing Difference Example
eIDT has been entered into SAP, but not posted by month end.
The expense would be reflected in your departments records, but not posted in SAP. It is expected to move through the approval process and post in the following month.
This IS a
reconciling
item.Slide33
$
(Dollar) Amounts are different
Identify invoices/charges with differing dollar amounts. Is the invoice final? Do you expect additional charges to be paid for this transaction?
These ARE reconciling items
.Slide34
Difference in $ Amount Example
eIDT posted to your account charging for 3.5 hours of police work @ $40 per hour, but amount posted in SAP is $160.00.
Contact the department that processed the eIDT to determine why:
Is the amount a result of a calculation error?
If yes, then the difference of $20
($160.00 - $
140.00) would be a reconciling item in SAP, requiring an eIDT correction.
Is the amount a result of the officer working 4 hours instead of 3.5?
If yes, then the difference of $20 would be a correction that needs to be made to your department’s records.
Slide35
Incorrectly Coded
Items
Possible coding errors:
Fund
Fund Center
Internal Order
General
Ledger CodeSlide36
Incorrectly Coded
Item Example
Expense
amount of $125.00 matches in SAP
and your department’s
records for 1000 pink answer sheets.
The General Ledger code in SAP is 721000 (Professional Fees and Services), but your records indicate the GL is 730000 (Consumable Supplies).
The SAP GL is incorrect. This would be a reconciling item for SAP.
Incorrect GL Code Doc# 123 -$125.00
Correction of GL Code Doc# 123 $ 125.00
An eIDT
correction must be initiated.Slide37
Erroneously Posted Items
Items posting in SAP that are not your expense (revenue).
Contact the department that initiated this transaction and obtain a copy of the source document.
Is the item charged to the wrong fund or fund center?
If yes, this would be a reconciling item in SAP and a correction in SAP will be required. Slide38
Erroneously Posted
Item Example
An invoice is paid to an Outside Vendor, but your department did not initiate the transaction.
Contact Accounts Payable (AP) to obtain a copy of the invoice.
Review transaction to determine initiator.
Contact the initiator’s department so that they can process an eIDT AP invoice correction in SAP to fix the fund / fund center.Slide39
Missing Items
Missing items can occur in either SAP or your department’s records.
Identify which system of record is missing the item.
Contact
the appropriate
office.
Evaluate the
supporting documents
to determine if the item is coded to the correct funding source
.
Initiate corrections to the correct system of record.Slide40
Missing support
documentation Example
An eIDT was paid to Copy Services, but you do not have a copy of the transaction.
Obtain a copy of the transaction from the Copy Services.
If the charge is correct, the expense needs to be added to your department’s records
.
If
the charge is
incorrect
, the expense needs to be
adjusted in SAP through an eIDT.
This would be a reconciling item in SAP.Slide41
Proposed
Corrections
The reconciler will occasionally need to
initiate
corrections to
SAP. The eIDT process can be used to correct Interdepartmental Transfers, Cash Receipts and Accounts Payable transactions.
The reconciler should make certain that all proposed corrections from previous months have posted.
Once reflected in both systems, they are no longer considered reconciling items. Slide42
Review for Proper
Approval
During the course of reconciling, the reconciler
must make certain that each transaction has proper
approval given
by the department’s account
manager
or
delegated authority.
Note: The new eIDT system does not require the account manager receiving revenue to approve the transaction. An assumption has been made that additional funds are never refused.Slide43
Step
6 – Reconciliation Report
Upon completion of the reconciliation, a report should be created which provides a snapshot of the reconciled balances between SAP and the department records (aka systems of record).
Each system of record will include the prior month’s ending balance, plus/minus reconciling items and an adjusted ending balance. The adjusted balances should equal.
The reconciliation report will provide an accurate depiction of your true account balance as of a specific point in time. Slide44
Step
6 – Reconciliation Report
The reconciler should provide
the completed
reconciliation report to the department’s account
manager for review and approval.
The account manager should sign and date the report to verify review.
The report should then be
filed within the department along with
supporting documents
used in the reconciliation process.Slide45
Reconciling Items from the Department’s Excel Record are added to the Reconciliation SummarySlide46
RECONCILIATION TEMPLATE
(
Can be found on Texas State Website under GAO-FR&A Forms)Slide47
SAMPLE RECONCILIATION
A sample reconciliation packet will be handed out in class as a reference. This sample packet can also be accessed on the GAO FR&A Texas State Website @
http://www.txstate.edu/gao/Forms.htmlSlide48Slide49
HELPFUL SAP T-CODES TO RECONCILE ACCOUNT
Budget to Actual Report - ZBUDACT
Salary/Fringe Report- ZFISALFRINGE
Purchase Orders by Account Assignment – ZME2K
Operating Expense Report – ZFI_OPER_EXP_RPT
Open Encumbrance Report – ZOPEN_ENCUMBRANCESlide50
Typical Document Types
ZB – Budget Changes
RB – Cash Receipt Transactions
J* - Journal Vouchers
PA – Payroll Posting
RE / NP – Accounts Payable
PK – Pcard Transactions
* Represents a wildcardSlide51
SAP-ALL POSTINGS
ZFMRP_RFFMEP1AX
Results have been filtered to include Invoices and Profit Transfer Postings only. Results then subtotaled by Period/Year and Reference Document Number, providing totals for each transaction, each month and cumulatively.Slide52
SAP-ALL POSTINGS
ZFMRP_RFFMEP1AX
Results have been filtered to include Invoices and Profit Transfer Postings only. Results then subtotaled by Period/Year and Reference Document Number, providing totals for each transaction, each month and cumulatively.Slide53
SAP-ALL POSTINGS
ZFMRP_RFFMEP1AX
Results have been filtered to include Invoices and Profit Transfer Postings only. Results then subtotaled by Period/Year and Reference Document Number, providing totals for each transaction, each month and cumulatively.Slide54
SAP-ALL POSTINGS
ZFMRP_RFFMEP1AX
Results have been filtered to include Invoices and Profit Transfer Postings only. Results then subtotaled by Period/Year and Reference Document Number, providing totals for each transaction, each month and cumulatively.Slide55
SAP-ALL POSTINGS
ZFMRP_RFFMEP1AX
Results have been filtered to include Invoices and Profit Transfer Postings only. Results then subtotaled by Period/Year and Reference Document Number, providing totals for each transaction, each month and cumulatively.Slide56Slide57Slide58Slide59Slide60Slide61
Congratulations!!
You have successfully completed
Account
Reconciliation Training through
Texas
State University
.