APPENDIX C: Supporting Document (1) Oracle ERP Programme BR-030 HQ Bank Reconciliation Exception Report

Transcription

1 APPENDIX C: Supporting Document (1) Oracle ERP Programme BR-030 HQ Bank Reconciliation Exception Report Version: v1.0 Prepared by:

2 Document History Revision Date Editor(s) Additions / Modifications Document Approval Version # Date Approved Signature Approver Name Title/Role & Functional Area 2 / 19

3 Table of Contents 1 Business Requirement Background Information and Scope Assumptions High-Level Requirements Bank Balance Book Balance Detail Reports Other Information Appendix 1 - High level description of the reconciliation process Manual Reconciliation Transactions to be matched Bank Statements Timing and warnings / 19

4 1 Business Requirement 1.1 Background Information and Scope Assumptions Finance Diviosn (CSF) reconciles all HQ bank accounts on a monthly basis. The reconciliation is between the Bank Statement (BS) balance and the GL balance. Cash Management (CE) Oracle standard functionality provides two reconciliation reports: The Bank Statement Detail Report which basically provides transactions in BS not reconciled at a certain date. In particular, it extracts all statement lines for the selected bank account within the parameters range (date from/to, statement number from/to, statement line status). The Cash In Transit Report which is basically a list of sub-ledger transactions (AP and AR) not reconciled. The logic of the report is the following, it takes the last receipt history line and: - If status = REMITTED then it select the receipt only if the receipt history date is lower or equal than the As Of Date parameter - If status = CLEARED then it select the receipt only if the receipt history date is greater than the As Of Date parameter So for example the above receipt is taken by the report only if the As Of Date parameter is before 08-MAR CSF (FAO s Finance Division) needs a report that will show all the reconciling items between the BS and GL balance that are not captured by the above two reports. 4 / 19

5 When Oracle was implemented in 1999, a third report was developed, CE Exception report which basically reports the differences between the subledgers and the GL. Since the implementation of Oracle Release 12.1 (R12), CSF is not able to reconcile the HQ bank account using the above 3 reports. At the year-end of 2013, HQ bank accounts have been reconciled manually and the results compared to the 3 reports. It appears that some reconciling items are not shown in the reports. 1.2 High-Level Requirements CSF needs to automate the monthly reconciliation of each HQ bank accounts. Considering the volume of transactions that flow through the accounts, the reconciliation cannot be done manually within a reasonable time to allow CSF to further investigate reconciling items and inform business units of items that are outstanding for a long period of time The expected Outputs for this business requirement are: 1. Reconciliation Summary; 2. Detail Report In GL and not in Bank; 3. Detail Report In Bank and not in GL. 5 / 19

6 Please, refer to the reconciliation below as an example of a Reconciliation Summary: FAO of the UN Bank Reconciliation Bank Name: HSBC GF DISBURSEMENT EUR Bank Account: GL account: 1342 Currency EUR Period: P13-13 Bank balance: 4, In GL and not in Bank Payments (from AP subledger) -296, Receivables (from AR subledger) 11, Cash Management (from CE subledger) 0.00 Payroll 0.00 Journals 0.00 Others 0.00 Total in GL and not in Bank -284, , Adjusted Bank Balance -279, Book balance: -2,967, In Bank not in GL Payments (from AP subledger) 1, Receivables (from AR subledger) Cash Management (from CE subledger) 2,670, Payroll 0.00 Journals 0.00 Others 15, Sub-total 2,687, ,687, Adjusted Book Balance -279, Difference The reconciliation must be between the bank statement balance and the GL balance. 6 / 19

7 1.2.1 Bank Balance The bank balance to be reconciled with GL at period end is the ending/closing bank balance at the last statement date of end of the month provided by the bank i.e. 31-Dec-2013 for the DEC- 13/P13-13 reconciliation period The balance reported in CE should match the bank statements as they are imported into CE by the bank reconcilers on a daily basis. The bank reconcilers are responsible for the correctness of the figures imported in the CE module. The two screen shots below show the bank balance used in the example of the Reconciliation Summary above: Figure 1 : Screenshot of Bank Statements Form in CE. 7 / 19

8 Figure 2 : Screenshot of Bank Statement Form in CE. 8 / 19

9 1.2.2 Book Balance The book balance represents the GL account (Segment 4 of the Chart Of Account) balance at the last day of the accounting/reconciliation period i.e. 31 December 2013 for the Dec-13/P13-13 reconciliation period. If the bank account to be reconciled is in local currency, the reconciliation should be based on the local amount balance in GL. For mutli-currency bank accounts, the reconciliation should be based on the USD amount. In the example below (GL account 1342), the natural account is selected in GL and the amount to be reconciled is EUR currency (please, see print shot below): Figure 3 : Screen shot of the Account Inquiry in GL. 9 / 19

10 Figure 4 : Screenshot of the Summary Balance in GL. NB. It is assumed that the YTD balance is the same as the PJTD balance of the GL account as PJTD represents the ending balance of the bank related GL account. 10 / 19

11 1.2.3 Detail Reports As stated above, the reconciliation must be between the Bank statement balance and the GL balance at the last day of the GL period being reconciled: No reports are needed for the items reconciled between CE and GL (blue areas of the figure above). 11 / 19

12 However, it is required that reports are generated as follows: Detail Report for the items in GL and not in Bank: Detail Report for the items in Bank and not in GL: The Detail Report In Bank and not in GL includes both Unreconciled items and Transactions reconciled with Sub Ledger but not in GL. 12 / 19

13 1.2.4 Other Information For most accounts, for example payments/disbursements bank accounts, a reconciliation is directly related using a common reference (please, see below): Figure 5 : Screenshot of the Bank Statment in CE. 13 / 19

14 There are cases where the field Numbers is not always populated or it could be wrongly populated. In this case the matching of transactions is manually performed by the Bank reconcilers. Manually matched items should be taken into account. A Drill Down of the matched item should give the correct reference transaction number (please, see below): Figure 5 : Screenshot of the Bank Statement lines in CE. 14 / 19

15 Appendix 1 - High level description of the reconciliation process Manual Reconciliation To manually reconcile HQ Bank Accounts we followed the below steps: a. Use as starting period the latest period automatically reconciled with the Bank Statement Detail Report, Cash In Transit Report and Exception Report. b. For each Bank Account, download from the web site of the bank, and export to excel format, the Statements with all transactions from the period of the latest reconciliation to the period we have to reconcile (in our case the last manual reconciliations refer to P13-13). c. Export to excel format all transactions recorded in GL For the same period of the Statements. d. For each bank account, upload the two files (Bank Statement and GL) in Access in order to have queries to compare and match the related items in both files. e. Reconcile the unmatched items with the three reports in point a. above to highlight the differences and investigate the reasons. Transactions to be matched GL TRANSACTIONS The book balance represents the GL account (Segment 4 of the COA) balance at the last day of the accounting/reconciliation period i.e. 31 December 2013 for the Dec-13/P13-13 reconciliation period. If the bank account to be reconciled is in local currency, the reconciliation should be based on the local amount balance in GL. For mutli-currency bank accounts, the reconciliation should be based on the USD amount. In the example below (GL account 1342), the natural account is selected in GL and the amount to be reconciled is EUR currency (please, see print shot below): 15 / 19

16 To have a complete listing of all Transactions during the selected period,we clidk on the Show Journal Details button and then we choose and expanded version of the folder: 16 / 19

17 And then Export: 17 / 19

18 Bank Statements The bank balance to be reconciled with GL at period end is the ending/closing bank balance at the last statement date of end of the month provided by the bank i.e. 31-Dec-2013 for the DEC- 13/P13-13 reconciliation period. 18 / 19

19 Timing and warnings Period: Dec-13 WHO Fund Type GL QUICK CCY A/C Number 1 V GF 846 SOND EUR EUR V GF 868 HSBC SEK V GF SOND EUR EUR IT83G X32 4 V GF SOND EUR EUR IT44D X22 5 V GF SOND DOL USD IT43F VARUS Viv GF O 898 SOND USD USD V GF O 899 SOND EUR EUR Viv GF M 928 HSBC HQ Cashier USD / F GF O 1035 BCI ID USD (ex ) 10 V GF M 1044 BISEUR EUR EUR 0D 11 V GF O 1046 BCI 09 USD (ex ) 12 F TF O 1047 BCI 10 USD (ex ) 13 F GF O 1048 BCI DE EUR Citibank EUR EUR 001XXXX F GF O 1054 BCI IE EUR V GF M 1057 BISUSD USD USD 0D Citibank USD USD 001XXXX Viv TF M 1087 HSBCTE EUR V GF M 1091 HSBCGE EUR V GF M 1096 HSBCGD USD V TF M 1098 HSBCTD USD V 1121 BANESTO EUR ES V GF M 1170 BPS -TELEF. EUR 3399X96 24 Viv GF M 1197 HSBCTELE USD USD V GF M 1305 FAO 03 USD FAO V GF M 1341 HSDUSD USD V GF O 1342 HSDEUR EUR Viv GF O 1343 HSDGBP GBP Viv GF O 1344 HSDCHF CHF V GF M 1345 HSDFX USD Viv GF O 1346 HSDJPY JPY V GF M 1347 HSBCFXP USD V GF M 1348 HSBCEURPY EUR Viv GF M 1349 HSBCGBPY GBP V GF M 1350 HSBCUSDPY USD Viv GF 1596 HSBC JPY JPY Total HQ Bank accounts There are approximately 35 bank accounts at HQ, of which 10 or 12 (depending on the periods) have to be manually reconciled. Unfortunately such 10 or 12 bank accounts are the ones with the highest volume, both in terms of funds and number of transactions. The last manual reconciliation was made for the period P Four people were involved in the manual reconciliation of all bank accounts as at P13-13 for about 2 months. CSF needs to automate the monthly reconciliation of each HQ bank accounts. Considering the volume of transactions that flow through the accounts, the reconciliation cannot be done manually within a reasonable time to allow CSF to further investigate reconciling items and inform business units of items that are outstanding for a long period of time. In any case, it will not be sustainable performing a reconciliation of all the accounts before the 15 th of the following month. In addition, the risk of error in manual processes is always higher. 19 / 19