The following instructions provide best practice guidance for individuals responsible for reconciling Balance Sheet account balances on a quarterly basis. Reconciliations can be completed manually using Excel spreadsheets or by using BlackLine accounting software. Financial Management Services (FMS) provides guidance as to which reconciliation method (manual or BlackLine) should be used. Learn about BlackLine.
Before You Start
- Review the Balance Sheet Account Balance Reconciliation and Attestation Schedule for the schedule of activities supporting quarterly Balance Sheet account reconciliation and attestation. Some Balance Sheet accounts must be reconciled and reviewed monthly. FMS designates the reconciliation frequency for account balances that must be reconciled and reviewed outside the quarterly review cycle.
- Understand Balance Sheet Account Balance Reconciliation and Attestation Roles and Responsibilities. Reconciliations should not be prepared by the individual who reviews and approves the reconciliation or the individual who creates transactions that change the account balance.
Set up the Reconciliation Spreadsheet
- Refer to Sample Excel Reconciliation Template.
- Document the following items on the Reconciliation Spreadsheet:
- Account number
- Purpose of the General Ledger account
- Purpose of the reconciliation, including the source of the supporting documentation
- Reconciliation procedure or the location of the reconciliation procedure
- Financial period covered by the reconciliation
- Reconciliation preparer name and date of reconciliation
Gather documentation to support the Balance Sheet account balance
Examples of supporting documentation include:
- Bank statements
- Executed legal documents
- Journal entries
- Subledger system reports
- Approval emails
Reconcile supporting documentation with the Balance Sheet account balance
- Document the reasons for any variances between the supporting documentation and the Balance Sheet account balance
These variances are called reconciling items. Reconciling items can occur for a variety of reasons, including timing differences, General Ledger activity errors or system errors (in Oracle or a non-Oracle subledger system).
- Attach adequate documentation to support the reconciling items
- Enter the expected resolution date for each reconciling item
Resolve current and prior period reconciling items
- Resolve current period reconciling items
Reconciling items can be resolved by recording or correcting transactions in a subledger system, Oracle or a bank account. The resolution depends on the reason for the variance. Communication and collaboration between departments may also be necessary to resolve the reconciling items.
- Update the status of prior period reconciling items
- Follow up on aged, unresolved reconciling items as needed
Resolve current and prior period reconciling items. Correct Balance Sheet account activity errors
- Communicate Balance Sheet account activity errors to the department responsible for recording the account activity
An example of a Balance Sheet account error would be an expenditure (5xxxx object code) that was miscoded to a Statement of Financial Position object code beginning with 1xxxx or 2xxxx.
- Coordinate the correction of Balance Sheet account activity errors with the department responsible for the account activity. Balance sheet account activity errors can be corrected using the iJournal module of Oracle Financials. Learn about iJournals.
Review the reconciliation and route for approval
- Verify that the Reconciliation Spreadsheet is complete (refer to Step 1)
- Verify that all supporting documentation for ending balance and reconciliation items are attached (refer to Step 2 and Step 3)
- Sign and date the reconciliation as the preparer
- Route the reconciliation to the approver
- The reconciliation approver and attestation owner will review the reconciliation. Refer to Balance Sheet Account Balance Reconciliation Attestations.
- Once approved, the reconciliation should be maintained in accordance with Administrative Guide Policy 3.8.1: Account Balance Reconciliation.