A RECONCILIATION A DAY KEEPS THE AUDITORS AT BAY

07-Aug-2018

With the assistance of our colleague End of Month Angels (EOMA - who are the specialist in Real Estate trust accounting) we have listed a number of recommendations to avoid one of the most common of breaches.
One of the main reasons for a breached/qualified audit report is the inability to reconcile the end of month trust accounts reconciliation. It is a commonplace to receive last minute calls at EOFY from clients who have not reconciled their accounts for the entire year. Hence the need to share with you our top reconciliation tips.
Whilst it is not a legal requirement to reconcile on a daily basis, it is always best practice. We would always recommend that reconciling the accounts as often as possible, if there is an error or misuse of funds it will be picked up sooner rather than later.

Reconciliation Tips

Reconcile daily

Don’t leave adjustments sitting there for more than 2 months, particularly at around 30th June. Reconciling daily means you avoid end of month stress and avoid the snowballing of any errors.

Include the last day of the month

Reconciliation must be up to and including the last day of the month, even if it’s a Sunday! Fear not, this doesn’t mean the agency needs to work on a Sunday. It means you are showing to the auditors that you’ve captured all of the transactions for that month as per the bank statement.

If you can’t balance, stop and get help!

Don’t move onto the next month without reconciling. Doing so will create a snowball effect that will be even harder to mend. We recommend contacting EOMA on 1800 366 435.

Only present items that appear on the bank statement

For example, debits will be shown in your unreconciled withdrawals, receipts will be found in your deposits.

Where to look if you can’t reconcile?

We all know the pain when we cannot reconcile. So where to look first?
1. Check to see if you have entered the closing balance correctly.
2. Firstly try the daily cashbook. Check to see if all entries on the bank statement match what has been receipted in the software.
3. Check the reconciled withdrawals to ensure they have been presented in the correct month.
4. Confirm the daily banking have been posted to the reconciliation.
5. See if there are any rejected payments on that day’s banking i.e. a rejected Bpay or returned funds.
6. If all else fails – seek professional help. Call EOMA

The main thing to remember in regards to reconciling is don’t leave it until the last minute! You are treading water with both your own stress levels and risking a breach on your audit.


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