UnderstandingGeneral Ledger Reconciliations
Why Do We Reconcile GLs?
Happy Members
Can Prevent Losses to the Credit Union!
Write-Offs
VISADisputes
ATM Cash
ACH Exceptions
Stale Dated Transactions
Total
0
10000
20000
30000
40000
50000
60000
70000
Inter-Department Cooperation?
Back Office or Operations Department
Accounting Department
Accurate Financial
Statements
Happy Auditors
Personal Pride
Questions?
Required Elements
• Face sheet (the recon)
• Date, GL number,
• GL Balance & Statement/backup balance
• Stale days counter & clear dates
• GL Transaction Register (forward)
• Proper Backup
• GL Transaction Register showing items cleared
SAMPLE CREDIT UNIONACCOUNTING SUSPENSE
870008October 31, 2006
Stale
Date Days Debit Credit Clear
11/30/2005 ADP Payroll pending refund 335 100.00 11/20/2006
7/24/2006 Staff Ded R. Rabbit 9.75 S/B 9.74 99 0.01 11/20/2006
7/31/2006 Investment Income Clearing 92 1,575.81 11/20/2006
8/24/2006 Expense Reimbursement Staff M.Mouse 68 1,246.38 11/20/2006
8/24/2006 Expense Reimbursement Staff M.Mouse 68 137.81 11/20/2006
8/28/2006 #12345 Disp Members CU/GNL/RBL 64 460.00 11/20/2006
8/31/2006 INV CLR Aug 2006 61 2,795.35 11/20/2006
8/31/2006 INV CLR Aug 2006 61 2,652.17 11/20/2006
8/31/2006 Reverse ADP Benefits 61 550.00 11/20/2006
9/1/2006 #23456-00 C. Robin (offset missing) 60 20.00
9/5/2006 #34567 (offset missing) 56 10.00
10/31/2006 Recon Balance (1,051.27)
10/31/2006 GL Balance (1,051.27)
Difference -0-
Stale Dated 2
Prepared by: __________________ Date _________
Approved by: __________________ Date _________
• Helpful tip• Add footnotes to face sheet indicating required
backup for each recon.
Accounting Detectives
Tools of the Trade
• Transposition Errors • If the difference on
a recon is evenly divisible by 9,
• It may be a transposition error.
• If the difference is 63• 63 / 9 = 7, 7 X 9 = 63
Know Your Times Tables
• 1 X 9 = 9• 2 X 9 = 18• 3 X 9 = 27• 4 X 9 = 36• 5 X 9 = 45• 6 X 9 = 54• 7 X 9 = 63• 8 X 9 = 72• 9 X 9 = 81
Finding the Error
• 9 / 9 = 1
• The difference between the numbers transposed must be 1
• 12 transposed with 21 (difference = 9)
• 23 with 32 (difference = 9)
• 34 & 43, 45 & 54, 56 & 65,
• 67 & 76, 78 & 87, 89 & 98
• There are eight possible transpositions
Another Example
• 18 / 9 = 2• The difference between the • numbers transposed must be 2• 13 transposed with 31 (difference = 18)• 24 with 42 (difference is 18)• 35 & 53, 46 & 64, 57 & 75, • 68 & 86, 79 & 97• Only seven possible transpositions
A Third Example• 81 / 9 = 9
• The difference between the
• numbers transposed must be 9
• 09 transposed with 90 (difference = 81)
• This is the only possible transposition
• For example: 109 transposed with 190
• The number of possible transpositions decreases as the difference increases
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