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Reconciling an account often means proving or documenting that an account balance is correct.For
example, we reconcile the balance in the general ledger account
Cash in Checking
to the balance shown on the bank statement. The objective is to report the correct amount in the
generalledger account
Cash in Checking teredtered in the generalledger account.I recall being asked to reconcile
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LEARNING OUTCOMES:
LO1:
LO2:
Reconcile accounts
LO3
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Contents
Accounting is a technical business function responsible for recording, reporting and analyzingfinancial
information. Small business owners use accounting to determine the profitability oftheir company &
rsquo;s operations. As small businesses continue to grow and expand,accounting processes and
procedures may be needed to maintain the company’s financialinformation. Accounting
processes and procedures are usually based on the basic accountingcycle. The accounting process
outlines how financial information flows through a company andwhich individuals are responsible the
information.
Identify Transactions
Identifying transactions or other financial events is the beginning of the accounting cycle.Business
owners use written documents to track specific information relating to financialtransactions. These
documents classify transactions and usually include specific informationregarding economic events.
Business owners also use this information to have a historical recordof business transactions. Once each
transaction is identified and classified, the information isrecorded in the company & rsquo;s general
ledger.
Record Transactions
Recording transactions is the physical process of entering financial data into the company’s
general ledger. Small businesses may use manual or automated accounting ledgers intheir business
operations. Manual accounting requires business owners to maintain several paperledgers for recording
financial transactions. Accounting software provides business owners withan electronic process for
recording transactions and maintaining financial information.Recording transactions may require
business owners to prepare journal entries based on financialtransaction documents.
The final output of the accounting cycle is the preparation of financial reports and statements.These
reports and statements provide business owners with information regarding the efficiencyand
profitability of business operations. Business owners often use information to makedecisions on
improving operational performance. Business owners can also use this informationto secure external
financing for growing and expanding their company.
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Each campus financial transaction, which includes purchases, payments, cash receipts, andledger
adjustments, is expected to meet the following seven control standards:
Appropriate:
Valid:
Reasonable:
Funded:
Accurately recorded:
Amount is consistent with value received, provided, or adjustedfor; and is free from accounting coding
or arithmetic errors
Supportable:
Amount and good or service received or provided, or justification foradjustment is consistent with
supporting documentation, standard, situation, or practice
Timely recorded:
Transaction date is accurateThe financial controls put into place at different stages of a financial
transaction process areexpected, when considered together, to provide reasonable assurance that each
transaction meetsthe seven control standards. Each control may focus on verifying that one or more of
thetransaction control standards is being met. Well-managed units effectively balance
operationalefficiency with the strategic deployment of financial controls. Here are some examples
ofcommonly deployed controls at different stages of a financial process:(For proper separation of duties
purposes, the individual performing the control activity must besomeone other than the person
performing the input or processing of the information.)Control Stage Description Example1. Entity set-
upreview and approval*Review and approval of the key set-up information about the person orentity
receiving a payment or a billReview and approval of the address, phone number, and taxpayer ID
numberfor a vendor set up in the FinancialInformation System (FIS).2. Transactioninitiation review
andapprovalReview and approval to initiate atransactionReview and approval of a purchase, journal
entry adjustment, travel advance,or billing request3. Transaction Review and approval of atransaction
just prior to theReview and approval of a purchase order,expense reimbursement form, journal
12
processing approval execution of the transaction.(This may occur more than once in a process. For
example, a purchasemay involve review and approval ofa purchase order and, later, of aninvoice
payment.)entry adjustment, or student accountadjustment4. Asset receiptverificationConfirmation of
receipt of a payment, good, or serviceIssuance of a receipt to a student makinga payment, or the
approval of a receivingdocument in the Financial InformationSystem5. Assetdisbursementverification
*Confirmation of the issuance ofUniversity assetRecording in a cash register or receipt book of the
issuance of a parking permitor an admission ticket6. Ledgertransaction reviewReview and certification of
financialtransactions appearing in generalledgerReview and certification of departmentalledger
transaction review7. Reconciliationreview and approval*Review and approval of an analysiscomparing a
general ledger balanceto a related balance amount provided by a third-partyReview and approval of a
bankreconciliation or a reconciliation of areceivable balance appearing in the FISto the aggregate
balance maintained inthe Academic Information System.*Usually applicable only to a central campus
office Not all control stages are applicable to all campus business processes. In addition, divisions
ordepartments may differ in level of reliance placed on controls at different stages of the process based
on staffing levels and competencies, system controls, and/or operational considerations.Despite these
differences, controls must be deployed in a manner that ensures each financialtransaction complies with
the seven transaction control standards.The following table provides an example of how two different
departments may implementdifferent procurement and payment process control strategies that both
enable compliance withthe seven transaction control standards. You will notice that at many control
stages, each
13
department places a different level of reliance on the related control procedures. But overall,each
strategy provides reasonable assurance of compliance with the seven transaction controlstandards. The
strategies assume that adequate separation of duties exists among the individuals performing the
control activities.
14
LO2:
Reconcile accounts
Reconciliation
A good internal control system provides amechanism to verify that transactions andactivity are for the
correct purpose andamount, and allowable.For each type of activity consider documenting the
particularinformation from source documents that is to be compared tothe appropriate report. This
assists to ensure that transactionsare valid and are correct in purpose. (example: determine thatfor
travel reimbursement source documents, the traveler name,destination, purpose of the trip, etc. will be
matched to themonthly financial report)Ensure that transactions have been properly
authorized.Especially, if the source documents are paper based, review for potential changes to the
document between approval and processing of transactions.Ensure that all transactions are allowable.
Error correction
:Errors and discrepancies, intentional orVerify the recording of transactions in a timely manner.
Reviewsource documents to assure they are processed and posted in atimely manner by the processing
department. If not, follow up
15
:Reconciliation processes are most effectivewhen they are consistent and thorough.Employees involved
in the reconciliation process should be knowledgeable and clearon their responsibilities and
expectations.It should be clear to an external reviewerwhen a reconciliation has been completed.Be
consistent with reconciliation processes. Changing thereconciliation process often leads to undiscovered
inaccuraciesand potential fraud.Reconciliation should be documented clearly to verify that areview has
been done.The reconciliation process and procedures should bedocumented clearly and communicated.
Consider documenting:The steps in the processWho performs each stepExpectations regarding
timelinessA mechanism for providing proof that all activity has beenreviewed and reconciledA
procedure for error correction.
Reconciliation is the process of comparing information that exists in two systems or locations,analyzing
differences and making corrections so that the information is accurate, complete andconsistent in both
locations. Balance sheet accounts must be reconciled on a periodic and timely basis to verify that all
items were correctly posted to the account. All funds within the balancesheet account must be included
in the reconciliation unless previous arrangements have beenmade. Without performing reconciliations,
inaccurate recording of transactions may occur thatwould result in incorrect reporting and could impact
resources.The Office of the Controller will maintain a master list of balance sheet account
assignments.This list will show the unit and person responsible for completing individual account
analysis ona monthly basis, where the supporting files (system and documents) are located and the
periodthrough which accounts have been reviewed. As new accounts are set up, the Office of
theController will assign an individual to complete the related periodic analysis.
Preparing Required Documentation
Retaining Documentation
Prepare a separate work paper for each balance sheet account to document the reconciliation.The work
paper must contain the following information:
17
a.
A brief description of the debit/credit activity that normally processes through theaccount.d.
Activity for the period - presentation will be determined based on the nature of theaccount and the
volume of activity that is recorded monthly in that account.g.
A list of contact names and phone numbers/email addresses for questions relating to theaccount.k.
Keep account information updated for changes in processing and other information.
Confirm the opening balance with previous work papers, or that balance was zero if thisis a new
account. b.
Review the activity posted to the account to ensure that detail items are:1.
Ensure that all expected charges, receipts or other activity appears in the account.d.
Take immediate action to resolve errors or discrepancies noted during the reconciliation process and
follow up to ensure that errors are corrected.f.
Maintain copies of supporting documentation for activity processed for the account.g.
Confirm the ending balance per the reconciliation agrees to the general ledger balance.
Submit the account analysis at the end of each quarter for review to the Office of the Controller.The
reviewer verifies that:a.
Analysis includes all of the funds within this balance sheet account. b.
18
d.
The account (fund and reporting category) has been assessed for the need to retain.
Retaining Documentation
Supporting documentation for detail items comprising the balance in the account should beretained
until open items have cleared. Supporting documentation for items relating to periodactivity (Accounts
Receivable records, Vendor Invoices, Cash Receipts, Journal Entries, etc.) inthe account analysis should
be kept in accordance with record retention guidelines.
Budget Reconciliation
This information is intended to provide guidelines for a regular budget reconciliation process.
Pleasereview all of the content provided in the sections below.
Definition
High level budget review and analysis by a person accountable for the budget (budget reviewer).
Purpose
All colleges, schools, departments and units should perform regular budget reconciliation for all
budgettypes.
(Note: For the purposes of these guidelines, we will use “department” as the standard word for any
budget reviewer
19
Who does not pose any separation of duties conflicts
: The Principal Investigator (PI) is responsible for their grant budgets, unless the PI has delegated
authority to another person who has direct knowledge of the needs ofthe project. See Reconciliation
Best Practicesfor additional guidance.
When possible reconciliation should be completed monthly, within 45 days of month-end close, but
noless frequently than quarterly. For sponsored agreements a final reconciliation should be completed
within45 days of the budget end date. Keep in mind that special situations such as biennium close may
takelonger to finish than
“regular” months.
1) Review transactions
When reviewing transaction amounts, keep in mind that sales tax may not have been charged bythe
vendor. The transaction amount posted to UW systems will typically include sales or use tax,and may
therefore differ from the vendor charge amount.
Look for any suspicious transactions or abrupt changes from an established pattern or trend.
2) Match transactions with supporting documentation
The person accountable for the budget has knowledge of the nature of the transaction, is able toexplain
what it is for, and the transaction originated from a UW source. The source documentneeds to be
reproducible and available according to the record retention schedule. Examples mayinclude: regular
salary charges originating in UW payroll system, and internal recharges (e.gISDs, CTIs).
It is less than $75 and your department has other compensating controls in place regarding
internal controlsover purchasingand receiving may affect the depth of your reconciling activity, and
departments may choose to be more restrictive with their threshold of review.
: Federal auditors may ask you to provide supportingdocumentation for these transactions. If sufficient
documentation is not available, your department may be responsible for reimbursing for these charges.
20
Grant and Contract budgets
Your departmental reconciliation procedures should document who is responsible for investigating
andresolving discrepancies, taking into account appropriate separation of duties. For errors involving
transactions of $10 or less, see guidance provided in GIM 15 Attachment B: CostTransfer Minimum
Thresholds(applies to all budget types).
5) High level review and analysis of budget activity by someone accountable for the budget
Remember that department records should provide evidence that the budget reconciliation has
beencompleted and reviewed.We recommend that departments document their reconciliation policies
and procedures, addressing anyareas that are not in accordance with the reconciliation guidelines
provided here. Documenteddepartmental reconciliation policies and procedures should be kept
current.If your department does not maintain its own budget reconciliation policy, auditors may use
theseReconciliation Guidelines and/or department internal controls to assess your reconciliation
practices as part of an audit.
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21
LO3:
Financial Background
A client's financial situation may change, so it is important for representatives to verify periodically that
the customer's information is still accurate. Clients may not beforthcoming with such changes, but clues
such as changes in purchases and sales mayindicate otherwise.
Objectives
As an investor ages, his or her risk tolerance, investment time horizon and goals change.All clients will
modify their investment objectives to match changes during their lifetime.
Address Changes
A change in address may affect the ability of a registered rep or broker-dealer firm toserve a client. If a
broker-dealer or rep is not registered in the state in which a client nowlives, no business may be
transacted until the registration is updated.
Transferring Accounts
When a customer wishes to transfer an account from one broker-dealer to another, thecustomer must
sign a transfer request with the new member firm, which is mailed to thecarrying firm.Both member
firms must coordinate their activities to expedite the transfer:
the client's new firm must immediately submit the transfer request to the carryingfirm, and
the carrying firm must either validate the instructions or take exception withinthree (3) business days.
22
Causes for exceptions to the transfer include incomplete or improperly signedtransfer instructions or
having no record of the account. Otherwise, the carryingfirm is obligated to make the transfer as quickly
as possible.
Account Statements
Broker-dealers are required to provide customers with a statement at least quarterly,although if any
activity has occurred in the account, the usual practice is to provide astatement for the month in which
the activity has occurred. The account statementcontains the following information:
Cash balances
All security positions
Activity in the account since the last statementYou will often need to explain to your clients when and
why they will receive statements.Some clients dislike receiving statements on a monthly basis because
they don't like theextra paper, so you must explain to them why your firm is obligated to send a
statementwhen there is activity in the account.
Customer accounts
Customer accounts store password-protected information about a customer's identity, orderhistory, and
current order status. This information is saved between visits, and retrieved when thecustomer next
logs in. Some details are used to pre-fill address information during checkout.Sending account invites to
customersIf your customer accounts are set to optional or required in your Checkout settings, you can
send
customers direct invitations to encourage them to activate an account. They'll receive an email
prompting them to create their own password.There are two ways to generate customer account
activation emails:
Individually
In bulk
23
Managing your store's customers is a vital part of your business, and Volusion makes managingcustomer
information easy.Customers registered with your store have their information stored within the
Customers
table.From this central point, you can manage customer information, see an overview of
customers,grant affiliate or administrator status, and more.
Customer accounts can be created in a couple of different ways - from your storefront by visitorsor from
the Admin Area by an administrator. Note that any customer type, whether a customer, affiliate, or
administrator, must have acustomer account. The only exception is if you've configured your store to
allow anonymouscheckouts. In this case, customers are not required to register for an account before
completing a purchase. Note that only standard customer accounts can be created from your storefront.
Once customeraccounts are created, customers can apply to become affiliates, but the affiliate status of
anaccount must be approved by a store administrator.
Payment Settings
The
Payment Settings
section lets customers edit their credit or debit card information, view giftcertificate balances, or apply
gift certificates to their account by entering a 13 digit certificatecode.Customers can also view their
order status and obtain special order information such asdownloadable products and product keys.
Customers
table or
Administrators
table, click on the IDnumber of the account.Each customer account has a variety of settings you can
configure - depending on the customertype or how you wish to manage customers. Note that not all
fields need to be used, dependingon the account type. To view the full list of customer account settings,
please see CustomerSettings.
24
Has it ever happened that you make a follow-up call, only to find out that another member ofyour team
had already contacted the customer? That would be a little embarrassing but wherewas the confusion?
After cross-checking you clearly noticed that there was no record of a call being made to the contact,
but there sure was a duplicate contact, assigned to another sales rep!Inaccurate or incomplete CRM
data often hamper sales and marketing performance. Many ofyour contacts would have changed their
phone number, email address or even their company,leading to an accumulation of redundant and
incomplete data in your CRM. So how are yougoing to maintain clean CRM data? Help yourself with
these 5 tips to not only get your CRMsystem under control but also to save time and headache down the
road.
Ask yourself one question: How complete are my records? Believe it or not, incompleteinformation is
not a good sign for data quality. The CRM account requires you to fill innumerous fields that are
mandatory. I
t’s
time-consuming! And as a sales rep, that becomes areason for you to neglect proper data entry. The
best way to deal with this is to set importantfields as mandatory: like name, email address, phone
numbers, and address. So, determine thefields that are most important for complete information and
encourage users to fill in thoseimportant details.
Since email address is unique for each individual, one simple trick to prevent duplicate records is by
comparing the email address of the contacts. While adding a lead/contact in Zoho CRM, younow have
an optionto check whether the newly added record already exists in your CRMaccount. Now this will
definitely save the effort of going through the records for duplicates
Preventing duplicates work great when adding new contacts manually, collecting leads/contactsusing
web forms, importing, etc. But what about eliminating duplicates from your existing data?By now, you
will surely agree with me when I say that duplicate records are not necessarily
identical. Let’s say, two contacts have the same last name, email address or company name but
one record has a phone number or address that is not found in the other. This is sometimesfrustrating
as some of the crucial information that you are looking for is scattered in both therecords. In that case,
instead of blindly deleting one record and potentially losing important data,you can merge the
informationinto one contact.
While automation does most of the work, human efforts are essential for data quality. One wayto make
data entry easy and maintain consistency, is by introducing naming conventions.
25
Sometimes you see the same country name in different formats. For example, USA, US, UnitedStates of
America. You can avoid this by creating a list of abbreviations and standard data entryformats for data
items like postal addresses, company names, designations, etc. Having astandardized format for all the
data helps you generate accurate reports and filter records basedon the exact criteria. Pre-defined drop-
down valuesalso helps a lot in eliminating a small part ofthe problem.
With data pouring in from several sources and multiple users accessing it, maintaining a cleanCRM
database is not that easy. One best practice is to restrict access to data in your CRMaccount. Define
Rolesthat will help you control the access rights of users while working withCRM data. That way, users
will modify only those records that are relevant to them.
We all realize how important it is to add clean data in the CRM system… and not just that, to
avidly maintain it too! Maintaining data quality is not a one-time event. If not taken care fromthe
beginning, you may end up having a tedious task ahead.
When someone is past due, being flexible is the best way to get what you're owed.It's just good business
to offer your customers options for making payments. These options caninclude payment plans, using
credit or debit card, online payments, checks, cash, money orders,
cashier’s
checks, automatic withdrawals or western."People tend to resist that which is forced upon them.
People tend to support that which theyhelp to create," says author Vince Pfaff. I am sure you can relate
to this quote and so can yourcustomers. When you call a past due customer and demand payment in full
you won't get as far ifyou called and offered a couple of different options for payment plans.If you have
never set up payment plans before I have some suggestions for setting up realistic payment plans for
your customers. One thing you must do is to make sure your customer knowsyou understand that every
situation is different, and that you will take into consideration theirability to pay, the amount unpaid,
their payment history, length of time they have been acustomer, and specific reasons why the account is
past due in working out a payment solutionwith them.
26
Make sure your customers know setting up these payment agreements is not something that can be
done all the time; you're doing it now because there is a problem and you want to resolve that problem.
Often, customers get very comfortable charging more products or services and justmaking the monthly
payment plan payment. You can avoid this by putting every agreement inwriting with a start date and an
end date.Some companies have rules about payment plans. This could include not entering payment
plans by one customer more than once per year or requiring a 15 percent deposit for all new payment
plans.With the economy a mess and more consumers unable to pay their bills, the objective of settingup
payment arrangements is to at least get paid something rather than nothing. Most customerswill look at
all their bills and then make a decision on which ones will get paid that month basedon what is most
important to them. It is your job to make your invoice important to them andoffer them realistic options
so they will pay it each month. You want to effectively outline policies and procedures that will help
provide your customers with options when they cannot payin full. Something to remember if you don't
like the idea of offering payment plans. If someoneowes you money, they probably owe others money
and who ever takes action first or offers asolution, will get paid first.
1.
Have two or more options for payment arrangements in mind before the call3.
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