Creating a New Format for Reconciliation Compliance

To create a new customized format for Reconciliation Compliance:

1. From Home, click Application, then Configuration, and then Formats.
2. Click New (+) .
3. In the Properties tab, enter:

   • Name

   • Description

   • Method

     • Account Analysis—Source System Beginning Balance and 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 include 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.

     • 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.

       The system then calculates 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—For a given period, the Balance Summary is compared to an earlier time period's balance and the difference between the two requires an explanation. The Unexplained Difference is calculated

       For variance analysis, unexplained difference = current period balance - variance period balance - variance explanations

       When a preparer reconciles an account using this format, the Current Period Balance, the Variance Period Balance, and the Difference between the two are displayed. If there is a difference, the preparer must provide an explanation.

       For a summary reconciliation, the Variance Period Balance comprises the balances of the summary reconciliation in the variance period. Therefore, if the summary reconciliation does not exist in the variance period, no Variance Period Balance is displayed.

   • Select the Display Account ID As option:
     • Concatenated String
     • Individual Segments

   • Require 0 unexplained difference

     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.

   • Select Prevent File Upload to prevent users from uploading files to reconciliations that are associated with this format. This includes uploading files as attachments or comments to reconciliations, transactions, and action plans. Note that attaching a file as a link is allowed.

     See About Using Formats to Prevent File Uploads.

   • Configure Reconciliation Compliance transactions, as described in Configuring Reconciliation Compliance Transactions.

Watch Creating Custom Formats in Reconciliation Compliance Video

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