[mckan514w]

Hi Ninjas! Been a while since I have posted but do lurk from time to time 🙂 I have a question that I thought I would throw out to you guys regarding best practices for GL reconciliations… if you do this or your firm does- how do you go about doing it? I have been hired to advise a small company on internal controls and processes and the way they are currently doing GL recs seems very archaic to me- but I dont have a lot of background in GL recs so I thought I would throw it out to you guys…

Currently they are doing them by hand pulling the GL accounts off the software then manually entering them into a spreadsheet and sometimes (not always hence me) back them out to the corresponding accounts (i.e. AR to aging and bank statements).

Any input would be great!

And they ask me why I drink

BEC 71, 82
AUD 75
REG 75
FAR 61, 69, 83

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[Anonymous]

Well, I can tell you the way I do it. I compare GL to subledger for most of mine. The reports are pulled from the software that the company uses for most of its accounting activities and those are dropped into Excel. On the spreadsheet I use for the recon, I have VLOOKUPS that pull the numbers from the reports (GL report and subledger report.) Whenever the amounts are unequal, that's when I have work do to, although it usually doesn't take too long. Often times, the differences are caused by things that never hit the subledger. Or, on rare occasion, a journal entry was not made in the GL and the difference indicates that. Bank rec, which I don't do in this particular job but did a lot of in the past, was always more of a pain in the butt because if the bank wasn't tying with the books, you had to hunt down the in-transit cash or look for amounts that never hit the bank or books. It was NOT fun. GL vs. subledger recs are not bad at all though. Our company recently just got a separate recon software that makes it easy for the B4 auditors when they come in. Each month, all the recon data that is done in Excel is verified by this other software, which pulls data from our accounting software (the same numbers that I pull in my reports that I use the VLOOKUPS on). We have to enter in all the recon items but that doesn't usually take long. Some recon items are permanent, they appear every month. The software also lets you attach supporting documentation (PDFs and Excel files.) If the numbers don't tie, you can't close the recon – you have to resolve it before it can be officially completed. This software basically takes the paperwork out of the recons and allows reviewers to sign off on each one electronically instead of thumbing through a ream of paper. And then when the auditors come, they can just go into the recon software and look for whatever month's recon they're wondering about.

Without knowing more about your process, I couldn't really make much of a comment but it sounds like they don't have a great way of doing it.

BTW I like your signature line. More than once in my cpa studies I have found myself saying “I'm a half-hour into this study session and already I need a drink!!”

[Anonymous]

BTW, I hope the above wasn't more info than you were looking for. I've omitted some specific things though (like the industry I work in and the exact names of the software used.)

[Adam]

I've never heard of firms reconciling accounts other then cash. Or perhaps a debt account.

[mckan514w]

Awesome information @crazyleon! Their current software has a module to do GL recs which I am assuming is similar to the one you describe, however I have learned that they are not fully utilizing their software and relying way to heavily on manual processes- Without going into too much detail they have a ton of different sub-accounts that roll into the GL which they insist are “essential”- so it might be a good idea for them to invest in rec. software per your suggestion.

and ha ha ha ha on my signature line- I am definitely drinking a **Little** bit less after passing this F__er- hang in there and get it done!!! 🙂

And they ask me why I drink

BEC 71, 82
AUD 75
REG 75
FAR 61, 69, 83

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[Anonymous]

Yeah the CPA exams kill a lot of people, or nearly kill them…meanwhile the AICPA gets richer off retakes than Bank of America does off late fees and bounced checks.

[Tim]

I worked in Kroger's accounting center for a couple years (revenue $122 billion) and all the account reconciliations were like you described. Excel spreadsheets, pull G/L balance from accounting system and reconcile in the spreadsheet. Make any necessary adjusting entries then sign off on the account after period close noting reasons and amounts for any out-of-balances. Some of the spreadsheets were relatively simple and others were very complex depending on the account.

edit: Some accounts had software that auto-reconciled and made the adjusting entries but still came down to the clerk to verify the account was balanced. For instance the lottery liability accounts were reconciled with a program called ReconNet that would load the lottery data from the POS system and then match that data against the lottery statements from the states and book all discrepancies with user review.

FAR - 97 (10/12/17)
BEC - 95 (01/15/18)
AUD - 88 (04/06/18)
REG - 89 (11/16/18)

[CISNC]

You may either want to utilize the built in recs in the software or use a product like blackline.

AUD - 79
BEC - 81
FAR - 80
REG - 76

NINJA only - no book, no notes, mcq and audio only

FAR - Pass
AUD - Pass
BEC - Pass
REG - September

[Anonymous]

@Adam believe it or not but at my company we rec nearly every account with activity (takes a while), because that's what the important people require of us. But to OPs question, we do it sort of like others described, we just use the trial balance and filter on the account we're proving out, the trial balance is just a direct spit out from the software. Then we tie it to the schedule, or subledger depending on the account.

[mckan514w]

Oh my gosh guys! Thank you for all of your replies! They are all very helpful…@Tim- I had a cousin that worked in the accounting center for Harris Teeter and he said the same thing

And yes @Dudley (and @Adam) This company ask that every account be reconciled…

Thank you all for the info! I really appreciate at it!

And they ask me why I drink

BEC 71, 82
AUD 75
REG 75
FAR 61, 69, 83

and they ask me why I drink...

FAR- 61-next time I'll ask for lube instead of a calculator
REG-75- Never been so happy to see such a low grade
BEC- 8/11
AUD- 9/2

[Author]

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