Record to report / R2R – Reconciliations
You have read about the process components of an intercompany reconciliation process:
- Statement collection
- Balance confirmation
- Listing of differences
- Timing differences segregation
- Evidence collection
Now if you really look at the above processes, are they really only for intercompany reconciliations? Not at all. They, in a generic manner apply to all possible reconciliations with entity variations primarily. Whether you need to reconcile your vendor or your customer accounts, or for that matter Bank accounts, most of the steps will be the same. For vendor accounts the reconciliations will be between vendors and the particular business unit, for customers it will be with the accounts maintained by the ongoing customers.
Some critical factors will be covered by me for each type, but I will not get into process steps for others, except that I shall cover the unique areas / process steps.
Next time I will cover the second type of reconciliation, which sometimes poses some unique challenges, i.e.
- Multiple systems – different ERPs in use in various units / legacy to current systems
Have you been following our accounting blog? http://faoblog.com/category/accounting-core/
Subscription and Guest Post:
You may subscribe to the blog from the subscription box on the opening page of the blog. We have enabled a button on the top of the first page, which will enable you share your posts. If you wish to write about any of the current streams, you can do it at http://faoblog.com/guest-post/. We will review your post and release it within 48 hours of your posting.