Formats for reconciliations are selected or designed by the Service Administrator. Reconciliation formats determine what reconciliations will look like, and the type of information that preparers and reviewers can enter.
Formats are completely customizable. A library of standard formats is available, or Service Administrators can build custom formats from scratch.
Format design impacts reconciliations by defining the following areas:
The information presented in the Balance Summary section
The types of transactions that exist within the reconciliation, as well as the attributes associated with these transactions and the rules governing who can edit the values of these attributes
The business rules impacting the reconciliation, including auto reconciliation routines and certain preventive controls that are designed to ensure reconciliations are complete and conform with policies
Formats are designed to evolve. You can start with one set of formats, and then modify formats over time as your business changes, or as you become aware of new or different risks. Every month when you create your reconciliations from your account profiles, a snapshot of the existing formats is taken. The snapshot copies retain the historical format with the reconciliation. As you make changes to your Format designs, the historical reconciliations continue to appear just the same as they did on the date they were created.
Restrictions on Changing or Deleting Formats
Formats cannot be changed on existing reconciliations. First, delete the reconciliation, then change the format on the profile, and then copy the changed profile into the period. The system calculates the Adjustments to Source System and Adjusted Source System Balance, and subtracts one from the other to calculate the Unexplained Difference. If there is an Unexplained Difference, the preparer uses the Explained Balance and Adjustments tabs to record any adjustments to get the unexplained difference down to zero.
- You cannot delete formats that are assigned to profiles. Remove the format from the profiles, and then delete it. You can delete formats that are assigned to reconciliations. Reconciliations point to a snapshot of the format; not to the format itself.
- You cannot delete the Short Description on the Format since it is a required field and there are navigation links in the reconciliation that are dependent on it. You can rename it if needed, but it cannot be deleted.
Reconciliation Compliance Formats
All Reconciliation Compliance formats are based on one of three methods: Account Analysis, Balance Comparison, or Variance Analysis.
The Account Analysis method is used for accounts that have no comparative balance. Preparers justify the account balance by entering the list of items that should be comprising the ending balance, such as prepaids, accruals, reserves, and intangibles, into the reconciliation. This list of transactions is called the Explained Balance.If there is an Unexplained Difference, the preparer uses the Explained Balance and Adjustments tabs to record any adjustments to get the unexplained difference down to zero.
The Balance Comparison method justifies the balance to be reconciled by comparing this balance to a balance from another source such as a subledger, a bank statement, a report, or any other external system. 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. The system calculates the Adjustments to Source System and Adjusted Source System Balance, and subtracts one from the other to calculate the Unexplained Difference.
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. 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.
For variance analysis, the Unexplained Difference is calculated by taking the Current Period Balance and subtracting the Variance Period Balance and the Variance Explanations.
• Current Assets
• Current Liabilities
• Non-Current Assets
• Non-Current Liabilities
• Prepaid Expenses
• Zero Balance Accounts
Balance Comparison* only available by using the Sample Application
• Accounts Payable
• Accounts Receivable
• Assets - Other*
• Bank Reconciliation
• Buildings & Land
• Fixed Assets
• TM Intercompany*
• Tracking Only
• Tracking with Reconciling Items
Variance Analysis* only available by using the Sample Application
• Variance Analysis Monthly
• Variance Analysis Quarterly*
Transaction Matching Formats
All Transaction Matching formats are based on one of three methods: Account Analysis With Transaction Matching, Balance Comparison With Transaction Matching, or Transaction Matching Only.
The Account Analysis With Transaction Matching method is used to match transactions within a single data source, for example, for debit and credit matching.
The Balance Comparison With Transaction Matching method to match transactions between source system and sub systems.
The Transaction Matching Only method is used when you are only using Transaction Matching and not using period end reconciliations.
Formats for Group Reconciliations
For information about defining formats for group reconciliations, see Administrator Set Up Tasks for Group Reconciliations.