About Reconciliation Compliance Formats

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

Reconciliation Compliance Formats

• 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.

  Note:

  For variance analysis, the Unexplained Difference is calculated by taking the Current Period Balance and subtracting the Variance Period Balance and the Variance Explanations.

Method	Format Name
Account Analysis	• Accruals • Current Assets • Current Liabilities • Equity • Intangibles • Investments • 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 • Depreciation • Fixed Assets • Inventory • TM Intercompany* • Tracking Only • Tracking with Reconciling Items
Variance Analysis * only available by using the Sample Application	• Variance Analysis Monthly • Variance Analysis Quarterly*