1. Administrator's Guide
  2. Setting Up Account Reconciliation Manager
  3. Managing Formats
  4. Creating Formats

Creating Formats

Formats for reconciliations are selected or designed by the Administrator. Reconciliation Formats determine what reconciliations will look like, and the type of information that preparers and reviewers can enter.

All Formats are based on one of three methods: Account Analysis, Balance Comparison, or Variance Analysis.

To create formats:

  1. In Account Reconciliation, click Manage, and then Formats.
  2. Click New.
  3. In the Properties tab, enter:

    • Name

    • Description

    • Reconciliation Method

      • Account Analysis—The Source System Beginning Balance and the Net Activity enable you to measure the change in an account from the last reconciliation performed for the account.

        The balance in the general ledger is substantiated through a listing of transactions that should comprise the ending balance. This list of transactions is called the Explained Balance, and it is compared to the General Ledger Balance. If there is a Difference, the preparer uses the Explained Balance and Adjustments tabs to record adjustments to get the unexplained difference down to zero. Examples of accounts: prepaids, accruals, reserves, and intangibles. The key to a high-quality account analysis is to ensure that the list of explained balance transactions includes sufficient detail to justify all items.

        In the Label column, assign descriptive names. The label names are displayed in the Balance Summary section of reconciliations.

      • Balance Comparison—The balance in the general ledger can be substantiated by comparing it to a balance from another source. That source might be a subledger, a bank statement, a system report, or a spreadsheet containing a complex calculation.

        When a preparer reconciles an account using this format, the Source System Balance, the Subsystem Balance, and the Difference between the two are displayed. If there is a difference, the preparer must record an adjustment on the System Adjustments or Subsystem Adjustments tabs.

        Account Reconciliation then calculates the Adjustments to Source System and Adjusted Source System Balance, and subtracts those two to calculate the Unexplained Difference.

        In the Label column, assign descriptive names.

        Select Hide to exclude rows from the reconciliation. For example, if the Subsystem Balance can never be wrong, on the Properties tab, hide Adjustments to Subsystem and Adjusted Subsystem Balance to prevent users from adding these types of transactions.

      • Variance Analysis method ensures balance fluctuations are monitored and explained if certain thresholds are exceeded. Variance Analysis compares balances across periods such as month over month or quarter over quarter or year over year. When a preparer reconciles an account using this format, they provide an explanation for the variance amount and send for review. At a higher level, a power user or administrator can look at summary reconciliations that roll up this information.

    • Auto Reconcile

      Auto Reconciliation Conditions

      Variance is within:

      • A specified amount: Enter a number that reflects the absolute value of the difference that determines when auto reconciliation will be performed for profiles using this Format.

      • A percentage of the current period balance: Enter a percentage that reflects the amount of the difference (measured as a percentage of the current period balance) that determines when auto reconciliation will be performed for profiles using this Format.

    • Require 0 unexplained difference (For Account Analysis and Balance Comparison Formats):

      Depending on the chosen method of reconciliation, the reconciliation calculates the unexplained difference as:

      • For Account Analysis Formats: The Source System Balance, less the Explained Balance, and less the Adjustments.

      • For Balance Comparison Formats: The Source System Balance, less the Subsystem Balance, less the Adjustments to Source system, and less the Adjustments to Subsystem.

      • For Variance Analysis Formats: The Current Period Balance, less the Variance Period Balance and less the Adjustments.

      Administrators can specify whether the format requires a 0 unexplained difference. If it does, the preparer can't submit the reconciliation for review until adjustments are created for the full difference between the source system balance and the explained/subsystem balance.