Profitz Weekly and Monthly Reconciliation Procedures

Weekly

Bank Reconciliation

Ensure all bank accounts are fully reconciled and that there are no unticked transactions

Unticked transactions need to be resolved as quickly as possible. Leaving them unticked means that you carry a variance between your actual bank account balance and the GL balance of the bank account

To double check the bank reconciliation run the GL Transaction Listing for the GL Code and filter to the date on the bank reconciliation. The closing balance from the bank reconciliation should match the sum of the transactions from the GL Transaction listing

Use a simple view wether its in Auto or Manual Mode to do this check, as there is likely to be a large number of transactions. The fewer columns you have on a view, the more efficiently it run

Unallocated Debtor and Creditor Payments

It’s important to make sure all cash payments and receipts have been allocated against their appropriate invoices. Not doing this can cause two problems:

1. You accidentally pay your creditors twice, because unallocated creditor invoices will still appear available for payment
2. Your aged balances will look lumpy

Check using the Debtor and Creditor Transaction Enquiries

Age As At the current month period and only tick the Cash transaction types. Then filter on the Outstanding column for values that aren’t 0.00 using !0

Any items here will needs reviewed to ensure they are correct

Monthly

Debtor and Creditor Reconciliations

Run the Trial Balance for the period you’re reconciling. Take the values of your debtor, creditor, and retention control accounts

The best reports to run for comparison are the Creditor Aged Trial Balance with Retentions and Debtor Aged Trial Balance with Retentions

Make sure to run for the same period you have used on the trial balance. If the balances from the reports don’t match the trial balance, we will need to investigate. The main culprit is journals directly to the control accounts.

If you have a variance between the reports and the trial balance, the first thing you need to is identify the period where the imbalance occurred. To do this, you will need to compare the GL balances to the reports for each period until you find the period with the problem. Start at the current period (in this case 7.25) and go back sequentially. 6.25, 5.25, 4.25 etc. At some point you will find a period where things are reconciled. We then know that the imbalance occurred in the next period. This will help narrow down the search for the problem transaction

99% of problem transactions are journals. We can use the information we’ve already got in the GL Transaction Listing to find the problem

This journal needs to be reversed, and we need to figure out what the proper transaction should have been. Contact support if you need help with this

The next check is that the GL Accounts are set to Posting Barred. You should NEVER process transactions directly to these accounts – this includes journals and invoice lines. If you have done this, the transactions will need reversed and then processed correctly. We can help you with this, just log a ticket [e-mail]

Another check you can run on the GL Transaction Listing is to filter by the Control Posting flag. Your GL Control Accounts – debtors, creditors, and retentions – should ONLY have control postings against them

We can see when I run this filter on the same data as above, we get a second invalid transaction in the debtor control account

We can find the AR Invoice using the invoice date

We can see that the line on that invoice has been coded directly to the debtor control account. That entire invoice will need to be reversed and re-entered with the correct GL code

General Ledger Reconciliation

Trial Balance

The first check is to ensure the trial balance is balanced. The fastest way to do this is to run the trial balance and sure the columns sum to zero

Small balances (less than $10) are ok – these are due to rounding errors on multiple line invoices.

Balance Sheet

The balance sheet gives us some very good reconciliation points. Total Net Assets are the sum of all the assets and liabilities. Total Equity is retained earnings (including the current year profit) combined with the value of shareholder contributions/drawings and other equity items. Total Net Assets should equal Total Equity

If Total Net Assets and Total Equity aren’t the same there are a few possibilities

1. The underlying report (BS in this case) isn’t configured properly – most likely
2. The relevant GL Codes don’t have the correct flag for End of Year Clear. All Profit and Loss items should have End of Year Clear ticked and Balance Sheet/Equity items should not – second most likely
3. There is an underlying issue with the data – very rare

Contact [e-mail] to get assistance with this. It’s usually a very easy problem to solve

Profit and Loss

The Net Profit should match what is on the Balance Sheet

Simple Checks

You can do some basic checks on the GL balances to see if anything has been coded incorrectly or missed altogether. Compare the balances of the accounts to previous periods to see if anything stands out.

For example, we can see a bit of a lumpy trend in the Repairs and Maintenance GL Code

This is a good one to check regularly to ensure that new asset purchases haven’t been coded here by mistake. You and your accountant will need to determine whether something is a genuine repair or if it’s the purchase of a new asset. We don’t offer advice on this as there are tax implications – you will need to discuss with your accountant.

Another simple check is the trend in your control accounts. Big differences in the balances might mean you have issues getting invoices entered on time or that you haven’t billed for all the work done. Any issues here will need followed up with your team