Process Portfolio
- 1. End to endAP invoice processing Purchase AccountDr xxxxxxx Expenses AccountDr xxxxxxx Services Dr xxxxxxx Taxes Dr xxxxxxx CreditNotes Dr xxxxxxx Vendora/c Cr xxxxxxx Complete P2P Whenthe material readyfordispatchfromvendorplace IR Dr xxxxxx VendorA/c xxxxxx Whengoods reached the Stores GR Dr xxxxxx IR xxxxxxx PaymenttoVendor Vendor xxxxxx Bank xxxxxx Complete O2C When Order has been received Inventory Dr WIP Cr WhenMaterialsready to ship COGS Dr Inventory Cr WhenGoodsreached/ acceptedby the customer Customer/ Receivables Dr Sales Cr Taxes Cr Other Charges Cr COGS Cr Whencustomerpays the money 1. Bank Dr Cash clearing Cr 2. Cash Clearing Dr Customer/ Receivables Cr
- 2. R2R Domain Introduction : Reconciliation means in ordinary meaning Understanding, Resolving, Reunion, Comparing and / or equalizing the two set of data or two sets of reports. Identifying the areas causing imbalance & substantiating the Variance causing the difference. Exploring the ideas & ways to resolve the variance with a proper document support for such variance to substantiate. R2R is a skill of presenting or reporting the Reconciliations in a systematic way which will contribute to the management decision making in the simplified and skillful artistic manner. It may be redesigning the or reformatting the reporting structure or upgrading to simplify the data presentation skills or any other skills contributing the ease of managerial decision making. Process Check in Point The Reconciliation activity starts only after the transaction posting activity ceases. The books of accounts closes for a particular period on/or after ending of the transactions being posted in to books of Accounts. So that the end balances will be uploaded to the reconciliation platform database. (it’s an Website) The activity of closing posting the accounting entries is called as Period Closure in accounting terminology. The process indicators / Legends The person performs or analyses the recon activity is called as Reconciliation Analyst. The base data to perform the reconciliation is called as Ledger Balances/ Account Balance / GL Balances. The transactions which are found active on the GL account and subject to be reconciled are called as Open Items. This GL balances being reconciled with the supportable balances. Supportable balances means the sum of transactions for the particular period for which the proper supporting docs available to substantiate / ratify / defend/ support the transactions recorded on the books with adequate documentation with proper approval levels and those are complied with Accounting policies & procedures and Accounting practices are within the ambit / in accordance with the accounting principles as whole. The Reconciliation statement is being executed on MS-Excel Spread sheet and subject to be uploaded on the GL Recon platform website with required comments and explanations. Reclassification means passing the necessary corrections on the books in terms of
- 3. principles and doc proof available and ensure that those are at par with the document proof of such transaction recorded. The variances means the disputed balances comprising the transactions which are out of the scope of Accounting policies & procedures and out of the accounting practices or these transactions does not / may not comply with the the accounting proper accounting principles Process in detail The Balance sheet Accounts (GL Accounts) are subject to be reconciled. .the end balances (period end balances) are reflected on the BS sheet GL Accounts which will be carried forward for the next financial period. (Assets & Liabilities). 1. The end balances being reflected on the GL Reconciliation platform website. 2. The Reconciliation Analyst will ascertain & categorizes the end balances according to the nature & feature of the GL account, such as AP GL accounts / AR GL Accounts / Assets GL Account / Liabilities GL Account The Asset & Liabilities is meant in broader sense comprising all types of Asset & Liabilities Account including for prepaid expenses, Outstanding Expenses and revenue recognition accounts including payroll related accrual accounts. 3. Download YTD statement of GL Account from SAP at the transaction level by enlisting all the document numbers on the particular GL account from beginning till the end of the particular accounting period. 4. Check the each transaction recorded by cross verifying those with the copy of the invoice / debit /credit notes / payment advice / copy of the receipt or any other document proof upon which the particular transaction has been recorded. 5. Verify the authenticity of each transaction in terms of approval / validity of the transactions upon its compliance with the company’s policies & accounting procedures & guidelines. 6. Validate the accounting principles as to the nature & features of the GL Account on which the particular transaction has been recorded. 7. In case of need as per the accepted guidelines advice the necessary rectification entries from the operational executive concerned. 8. Identify whether the features & nature of GL account complies with the nature & feature transactions recorded in it. Or vice versa including the accounting principles as well. Check whether the debits & credits recorded are appropriate.
- 4. 9. In case the transactions deviating the any of points explained above. List them out separately. Such transactions become variants & need to show them as variances. 10.Perform the account clear for the completed transactions means where the debit transaction is available for a credit or vice versa. Ensure that these transactions also comply with all the above check points. 11. Once the supportable balance ascertainment task is completed. Cross verify the end balances listed on the recon platform website, with the GL Account closing balances available on SAP. Ensure that the month end balances and GL balances at the period end as per SAP agrees with a zero output. 12.In case any of the GL account balances found variance explore the reason for such variance explain them with proper reasons 13. Age the variances as per the aging buckets 30 / 60 / 90/ 180 / 360 / above and show the action plans as per the company’s GL account recon guidelines provided by the Finance controller or the Corporate Accounting Head (CFO). 14.The explanation need to be provided for each variances at the GL account level on the recon platform website. 15.In case the supportable documents not available for any of the transactions of a particular GL Account, need to show that as Un-Reconciled 16. Perform the thorugh check on each GL account level as to GL of the reconciliation activity has been completed in all respect for each of the GL Account. Ensure that the required parameters have been complied the supportable balance availability, showing the variances, clearing the variances if any. Explaining the variances, Aging action plan and the other information if any and as per the case may be. 17.At the end forward each of the recons to the supervisor / TL / Manager / next level of approver at each GL Account level after all the recon statements have been uploaded on the website including comments & remarks for each of the GL account found on the Recon platform. Post Reconciliation activity Follow-up with the required operational executory point s or the escalation points as per recon guidelines provided by the client or clients corporate Accounting team or
- 5. by any the officer deligated to do act upon as authrised by the client head. (CFO / Head of )Corporate Accounting Team. Organise the meetings and set up the telephone calls to resolve the variance in stipulated time as per open item aging. Escalate to the higher level as per the guidelines on the escalation matrix. Endeavor & take ownership Undertake all types of genuine actions and try a max to clear the open items and keep the each account in tact in all respects within ambit of client’s corporate accounting & reconciliation policy. Watch the ammendments to the corporate accounting policies guidelines, notifications or circulars which will be amended on frequent intervals. The End ~~~~~~~*******~~~~~~~