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How do you do month-end reconciliations?

In my former job they were doing reconciliations in Excel when I arrived and had literally 10,000s unreconciled lines in the accounting system and quite a few corrective postings were needed once I forced them to reconcile in the system. My current company is soon going live with Blackline but how are you/would you guys solve it?

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

10,000 lines.... What exactly were they reconciling, every transaction made each month? - said without knowing how many transactions this company did on an average month...

Anders Liu-Lindberg
Title: Regional Finance Business Partner
Company: Maersk Line Northern Europe
LinkedIn Profile
(Regional Finance Business Partner, Maersk Line Northern Europe) |

In a year you would have 30,000 lines in the P&L including accruals and reversals (which also needs to be reconciled if not done automatically by the system) but the lines were left unreconciled from 2007-2012 so all in all you can imagine how many lines needed to be reconciled.

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

What can we assume is reconciled. Cash? A/R, A/P and other important balance sheet accounts?

If that's true, then its income/expense, and what has been the historical history on fixing a reverse sign on revenue or expense (not misapplication of account). If that's the case, then we need to ask how valid Net Income is...

Mark Matheny
Title: VP - FInancial Planning and Analysis
Company: Novolex (formerly Hilex Poly)
(VP - FInancial Planning and Analysis, Novolex (formerly Hilex Poly)) |

Unfortunately, everywhere I have worked the balance sheet reconciliations were manual in Excel. We did try to standardize journal entry comments to assist.

Sandra Habiger
Title: Project/Financial Analyst
Company: Alliance Enterprises, Inc
(Project/Financial Analyst, Alliance Enterprises, Inc) |

We reconcile to excel spreadsheets. We have one for each major Balance Sheet account. We close our books on a monthly basis, so we make sure to reconcile the GL number to the spreadsheet number. Then, we print it as a back up for our Month End Book (it's basically a binder with 8 tabs. Current Assets, Liabilities, Payroll, Fixed Assets, Other Assets, Revenue, COS and Taxes). At times when we don't reconcile to the cent, the Accountant researches the discrepancy. Sometimes, the spreadsheet is missing something, other times, the something was booked in an incorrect account. We are trying to start using Salesforce to manage our revenue more and more, so there is not as much discrepancy as with spreadsheets. Also, our accounting system (Dynamics GP) has a "Reconcile" in it's utilities. It reconciles the sub ledgers to the GL.

Anonymous
(Controller) |

We reconcile all balance sheet accounts for each entity on a monthly basis. We use biznet in excel that pulls the ending GL balance by account from the financial software on each account tab and then below perform the reconciliation of what makes up the balance. The variance to the ending GL is shown at the top of the reconciliation so you don't have to scroll down to see that the account is reconciled. We use different colors on the tabs to visually understand progress- blue in progress, yellow ready for review and green approved. Even though using Excel, we have automated the ending GL so that there is no issue with manual errors and its refreshed everytime you open the workbook. We have 5 entities in different currencies and we reconcile to the home currency.

Mark Koch
Title: Controller
Company: Turtle Beach
LinkedIn Profile
(Controller, Turtle Beach) |

Hi- we have Biznet also and like your idea for reconciliations. Was curious how you have handled training your team on this product, or if you would be open to comparing notes on other uses.

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

I looked a Blackline at a former employer and thought it was a strong product and recommended its adoption. The workflow and audit support are strong reasons to adopt it as your org gets more complex.

You can get by with manual recs for quite awhile but after you are multi-national / multi-entity it just stops making sense.

EMERSON GALFO
Title: CFO
Company: C-Suite Services
LinkedIn Profile
(CFO, C-Suite Services) |

Here is my take on the topic....

Unreconciled or perennially out of balance accounts are SYMPTOMS that there is something wrong with data capture and recording. Month end reconciliations (and close) should not be much of a hassle. If the cause/s are not addressed, then it will be the same month in and month out.

Len Green
Title: Performance Improvement Consultant and E..
Company: Haygarth Consulting LLC
LinkedIn Profile
(Performance Improvement Consultant and ERP Strategist, Haygarth Consulting LLC) |

Anders
I see 2 separate issues here:
1. Fixing the errors of the past
2. Changing processes so that the need for reconciliations declines, if not disappears for all but a few key items (nirvana I know, but stay with me:) )

1 is a short term project
2 is a goal-what do you need to do to your processes and systems to achieve this?

It is heavily driven by what systems you use and how they are integrated. If your GL allows posting of entries to the AR or AP control account without going thru the sub-ledger, that's a problem. Old legacy systems used to allow it.
Intercompany transactions need a clear policy and a firm management process.

Blackline has been used by some of my former clients with large reconciling needs and it seems to have done well for them.

Regards

Bryce Christensen
Title: Senior Consultant
Company: Carrtegra, LLC
(Senior Consultant, Carrtegra, LLC) |

I'm a process consultant and the firm I belong to focuses on strong accounting processes and controls. I'm also a BlackLine certified implementation consultant (one of two specific software products we explicitly endorse) because we find that it is a strong product for reconciliations and for tracking period end and related tasks- especially those that must be documented for auditors. We also finds that BlackLine enforces many of the controls we find missing or poorly operating in companies we consult with.

In a former life, I did month end with spreadsheets. It was messy- dynamic formulas made the work easier, but sometimes screwed up the documentation if they are updated. Static spreadsheets were difficult to update, because any change required recalculating totals, etc. BlackLine provides a happy medium between the two- once a reconciliation is complete, it is locked down and cannot be edited, so you know it'll match the when the auditors ask for support . But while it is open, the (basic) recalculations are automatic. And a copy of any complicated calculations that are done in a separate spreadsheet can be stored without concern that they will be edited- allowing you to keep the dynamic version of the spreadsheet without worrying to updates will affect past reconciliations.

I hope this doesn't feel to much like a sales pitch- I'm just a big fan, which is why I got certified, not the other way around.

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