Keeping Up with AFS ERP Financial Reconciliations

Bob Letourneau & Meghna Batra

This session will provide practical tips on how to manage monthly financial account reconciliations. You will learn all the basics to perform subsidiary ledger balancing.

Session Objective

Agenda• Understanding Reconciliations

• Common Mistakes

• Methods & Techniques

• Reconciliation Services

• Question and Answer Session

Understanding Reconciliations

• What is Account Reconciliation?• Matching subsidiary reports to the General Ledger• Confirming the transactions posted and the account balances.

• Significance of Reconciliation• Identifying errors & correcting• Accuracy of financial statements• Being prepared for an audit• Strategic business decisions

Why Reconcile?

COMMON MISTAKES

• I only need to reconcile once a year• I don’t need to check since we’re not doing anything wrong in

ERP• It’s not off that much; so, I’m not worried about it• I own the company. As long as I have money in the bank, I’m

doing fine.• We have really good outside accountants that we give reports

each month• I’ll do it myself (When I get chance)

Dispelling Myths

Methods & Techniques

Step 1: Collecting the documentsThe following end-of-month reports are needed:-

• Compare the balance on the report with the figures on the GL trial balance

• Move forward with the reconciliation only when these two are not the same

Step 2: Finding the difference

• Common Factors:-

• Journals were not consolidated & posted

• Wrong journal sources due to incorrect mappings

• Timing differences

• Transactional errors

• Manual journal entries

Step 3: Finding the reasons for the difference

• General Ledger• Subsidiary Journal Processing

• Detailed Journal Reports (By Module)

Identifying Unconsolidated Journals

• General Ledger• Subsidiary Journal Processing

• Un-posted Consolidated Journal Reports • All Modules• Individual Modules

Identifying Un-posted Journals

• Subsidiary Journal Processing• Detail Journal Consolidation

Consolidating Journals

• General Ledger• Subsidiary Journal Processing

• Subsidiary Journal Posting (By Module)

Posting Subsidiary Journals

• General Journal Processing• Posted Financial Journals

Verifying Journal Sources

• Meaning:- Timing difference is caused when there is a gap when transactions are taking place and the general ledger period to which the transaction belongs.

• For example:-• Inventory was depleted by a sales order with a transaction

date that posts to the following GL period• Purchase Orders are received in one period and a PO

Quantity or PO Cost adjustment is done in a subsequent period

Finding the Timing Difference

• Timing Difference for Inventory:-

• Look for transactions where entry dates and transaction dates are different. For example, transactions with entry date in 2014-04 vs. transaction date in period 2014-03 or vice-versa.

• Find the difference by running the transaction detail report by entry date and by transaction date.

Timing Difference- Inventory

• Timing Difference for Receiving Clearing:-

• Look for the cost and quantity adjustments done for the received purchase order in a period other than in which it was received.

• To find these kind of transactions, run the purchase detail journal report by the fiscal period or run the transaction detail report for adjustments by the entry date and group it by transaction date.

Timing Difference-Receiving Clearing

• Compare credits on Bank Statement to ERP• Clear Outstanding Checks in ERP (AP => Check Menu)• Print Outstanding Check Register• Check for manual journal entries

• Compare deposits on Bank Statement to ERP• Print AR Detail Journal Report by AR batch & GL Account • Check for manual journal entries

• Enhanced functionality being developed in 2014

Bank Reconciliations

Example Reconciliation

• Steps after the reasons for variances are identified

• Make correct journal entries in timely fashion.

• Run the subsidiary reports and trial balance to make sure that the period is reconciled and there are no pending differences.

Step 4:- Reviewing the Reconciliation

AFS provides a reconciliation package for ERP & .NET Financial customers.

• Experienced Team at AFS.

• Regular Year-End and Month-End Process – Ensures accurate, up-to-date books.

• Time Management - This service frees up your time so that you can focus on making decisions & set priorities based on reviewing your monthly financial statements.

• One Stop for your Questions - All your questions & concerns regarding your reconciliation and period-closing process will be handled by the representative assigned to your account.

Reconciliation Service

AFS Technologies (AFS) is the leading provider of software solutions purpose-built for consumer goods companies. We are committed to generating improved outcomes at the point of purchase coupled with generating efficiencies in trade spend, retail execution and supply chain. With experience developed over its 30 year history, AFS serves more than 1,300 customers of all sizes in over 50 countries around the world. The AFS products are innovative, configurable solutions that are proven to optimize your potential with automated processes, improved productivity and rapid time to value.

To learn more about AFS, visit www.afsi.com.

About AFS Technologies

Questions?Name: Bob Letourneau Title: Director of ERP SupportEmail: bobl@afsi.comPhone: 602-443-4299