General Ledger Reconciliation

Purpose

The monthly reconciliation of the General Ledger to the account modules ensures that the previous months processing is correct.

The General Ledger system is designed to collect financial information and present that on a monthly basis in the form of a trial balance. The trial balance can then be used to analyse the company’s financial position.

Timing

The General Ledger should be reconciled immediately following the month end reset being completed on all modules.

Exception

Payable Module Users Only: 

The Payables Module is often left open until the middle of the next month so that invoices dated the previous month can still be loaded.  When the Payable end of month is run, these will then update the GL in the correct month. It will be necessary to ascertain that cash movement from the Payable Module and deduct that from the GL Trial Balance batch balance to reconcile to the Cashbook Bank Reconciliation.

Process

Once the Trial balance is printed, you will need to check GL control balances to month end report balances.

The following balances should be checked against the General Ledger Trial Balance.

Control Accounts

From the Account Status Report summary, there are balances under the columns headed current and future.  Each of these balances needs to be checked to the relevant GL code. 

The number of balances to be checked will depend upon the number of Account Types.

E.g. Account Status Report shows current and future balances for each account type:

These figures should reconcile to the GL YTD balance for these GL accounts:

 

This process should be repeated for each account type used.

Bank Balances

The Cashbook Reconciliation report should be used to confirm that the Cash Book Balance is the same as the GL Bank account balance for each bank account.

If there is a difference between the balances, these should be investigated and resolved.

Clearing Accounts

Always check the balance of the GL SUSPENSE Account and ensure you are happy with the reason if there is a balance.  The balance may be due to:

1. A timing difference between the transactions adding to this account.  E.g. A transaction may be added this month, and the offsetting transaction entered in the following month. 
   
2. There may be a transaction that is awaiting clarification of where it should be correctly posted to.

If this does not explain the balance or if there is other clearing account(s) with a YTD balance, these should be investigated and resolved.

It will also be necessary to check the Unearned Interest balance for each Account Type.

Accounts to Reconcile

The below table shows the report that will be required to balance against the General Ledger code for any of the above reports that apply to your company.

Report	Report Column	GL Code
Account Type CL
Fixed Loan Account Status Report	Current	ACL
Fixed Loan Account Status Report	Future	GRCL
Fixed Loan Earned Interest Report	Unearned End	UICL
Account Type CLSALV
Fixed Loan Account Status Report	Current	ACLS
Fixed Loan Account Status Report	Future	GRCLS
Fixed Loan Earned Interest Report	Unearned End	UICLS
Account Type BL
Fixed Loan Account Status Report	Current	ABL
Fixed Loan Account Status Report	Future	GRBL
Fixed Loan Earned Interest Report	Unearned End	UIBL
Account Type BLSALV
Fixed Loan Account Status Report	Current	ABLS
Fixed Loan Account Status Report	Future	GRBLS
Fixed Loan Earned Interest Report	Unearned End	UIBLS
Account Type DL
Account Status Report	Current	CDDL
Account Type INS
Account Status Report	Current	CDIN
Account Status Report	Future	INSRD
Account Type All
Account Status Report	Current	CDCL

Other Accounts

A ‘sanity check’ should be completed on the remaining codes to ensure that the month movement seems to be a reasonable figure.

The month movement from the previous year is often a good indicator (taking into account any major business changes).

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