Record to report / R2R – Reconciliations


The concept of the reconciliation dates and periods was discussed in the previous post:


What activities will be performed in an inter-company reconciliation process?

  • Statement collection – The first step would be to collect the statements from various units which have had transactions with the reconciling unit. This will be done by multiple units, so each unit will share its statement for all units it has transacted with or has some debit or credit balance of the other unit.
  • Balance confirmation – Some companies also mandate a balance confirmation to be shared for record purposes, normally at period ends, especially, quarterly, half yearly and annually.
  • Listing of differences – The difference in the balances is listed in a table. Though this is not a mandatory sub-process, but it helps by eliminating the effort for accounts / units where the balances match. There could be a one off case where although the balance matches, however, the items may still have some difference. But this would be rare, and offsetting.

I will cover more components next time…



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