Hi Jo,

it's the reconcilliation in the extended trial balance comparing the accounts as they were presented in the last financial statements against what exists in the software package and identifying the necessary journals to correct.

The reconciliantion tends to come in two parts with the prior year reconcilliation and current period where such also reconciles the P&L.

Its horrible and it's time consuming and it always gives me far more hassel than the actual preparation of the accounts.

Shaun.

Morning Shaun
I probably shouldve added this is a newco, so its the first years accounts. But if it hadnt been (not intending to swerve matters/pass the buck) isnt this normally a job for the Accountant?

With most of my others I get the adjusting journals from the Accountants and will key them, whilst always making sure they are right and dont knock something else out of kilter (eg one only gave me half the info one year! No idea if that was a genuine error or a test!lol) plus then I check to the balances they give me (when they do). This lot never do for the other companies I also look after.

So the worse thing is - if I have to do this for one of the same clients other companies (completely different year end) as Ive not been given the figures that make up the financial statements, but even if I did, last year they sent someone to key the year end adjustments and they made a right old hash of it. They did a write off of debtors but said they didnt know which ones (but they were the ones who had lengthy conversations with the client and had access to the debtors list at that time and frankly I dont have, despite repeated requests!!) so have just put an 'adjusting debtor' lump sum journal in with no amendments to the individual debtor accounts. They also dumped balances in two of the Bank accounts which bear no resemblance to anything, and Im talking big numbers here. I think these are maybe to represent the transfers to that were to save for corporation tax, but the accounts are in personal names so tracking money actually being used for those purposes is impossible for me as I have no access to those Bank statements. But why of why not just put it in a spare Bank account so it doesnt just lurk every time you try to do a Bank rec. Theres loads more! Im still trying to unravel lots on that one, but the newco is clean.

Pondering. Thanks Shaun.

EPF_Solutions wrote:

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In my very first job, working in a medium sized manufacturing company, I had to do a regular reconciliation of every balance sheet account. When I became self employed, it's something I started doing for every client, so that I knew that each account was right, and it was part of the package I provided to the accountant/auditor (whether they asked for it of not!).

What I did is basically just a list of the items that make up the balance of the account, similar to a bank reconciliation, with supporting documents attached.

A bank balance is the statement and a list of uncleared and unpresented payments
The Sales and Purchase Ledger Controls are debtors/creditors lists
Sundry Debtors would be a list of the amounts outstanding
Accruals and Prepayments would be my spreadsheets for calculating them

Any errors and things to investigate would also be included, but these would all be sorted by the year end anyway!!

It helped me to produce accounts that were so accurate, that the accountants never needed to change my figures, unless it was for tax or political reasons. So I didn't have to try to translate their opening TB that was totally different to mine, as they had no excuse to mess with my numbers without justification! And no nasty and unexpected problems occurred due to errors hidden in the balance sheet.

Back in the olden days, we had photocopied forms to fill in with one of those olde fashioned writing stick things. I had mine set up in a spreadsheet template, that I could quickly set up for each client, and regularly update. Spending a bit of time updating it was much easier than spending ages trying to find out what had gone wrong if a problem came to light.

If you don't do this, how do you know that the balance sheet, and the rest of the accounts, are right?

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Ah right.  Ive just realised from the way you have said it that this is something I actually mostly do on an ongoing basis for this client' main company but just didnt realise thats what it was called.  They use their own software for invoice production and Ive got allsorts from when the system failed and from my regular uploads so that I can prove my figures to the Accountant, alongside a huge exercise I had to do for proving the figures on transfer of invoice discounters (which involved debtors confirming the invoices up to a point too).  I dont have statements from their suppliers which is something Ive been trying to get hold of (or at least activity lists to make sure Ive included everything), plus for accruals and prepayments I have spreadsheets and I dont just use one nominal account in sage - I set up a 5 digit nominal code for each type of expense accrued/prepaid (an old Foxy trick - thanks for that Michelle), so they are easier to track, etc etc..  So its hopefully not going to be quite as bad as I first feared (well for this one it wont - for their other companies, mostly before my time and with half an information base, it will be a mare, although again at least I can 'prove' the stuff they have entered!)  

Thanks both.