Record to report / R2R – Reconciliations


We shared the following posts on Intercompany reconciliations till now:

So, very simply, like all reconciliations, you have two sets of records by different units and the activity will comprise of comparing the transactions, so that the difference in the balance as on a particular date can be identified, explained and entries passed for the mismatches.

Did you read between the lines here? The difference is as on a particular date. Which implies that any reconciliation will be as on a certain date and not for a period. There is a misnomer in the outsourcing world – quite often, process owners / executors define a reconciliation for a period. This is actually incorrect. A reconciliation will always be on a certain date.

So why is this misconception in vogue in the outsourcing world? Primarily because, quite a few large companies have un-reconciled accounts persisting for a longer period, and to at least match the current transactions, they freeze some differences in the opening balances. Thus the reconciliations will cover transactions in a defined period, which they prefer to classify as reconciliation for a period.

And what would this period be, rather the date of reconciliation be?   Thought for the next post 🙂 ……..


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