Correctly drawn up act of reconciliation - no errors in accounting and differences with counterparties
The reconciliation act is a document designed to determine the status of mutual settlements between counterparties. The legislation does not oblige organizations and individual entrepreneurs to compile these documents on a mandatory basis. However, the majority of accountants prefer to periodically conduct this work in order to avoid accounting errors and possible disagreements with suppliers and customers.
Purpose of the document
The reconciliation act is intended to document the status of settlements between the two organizations on a specific date. With this document, you can trace all business transactions conducted with the participation of contractors in the context of contracts or for a particular organization as a whole, and derive the final balance on a particular date.This balance can be confirmed by both parties to the reconciliation, and only by one legal entity or individual entrepreneur. If according to the accounting data there are discrepancies in the sum of the final balance, then they can be eliminated by studying the operations that are indicated in the reconciliation statement. In the accounting of an organization may be incorrectly reflected the amount of any sale or payment. In case of detection of errors, the accountant makes corrections in the accounting, after which a new act of reconciliation of mutual settlements is drawn up, which is signed by the authorized persons.
The legislation of our country does not provide for the obligation of companies to draw up reconciliation acts at a specific time. Each organization independently decides when it is necessary to conduct an audit of settlements with counterparties, and whether it is worth it at all. In this case, there are several situations in which this procedure can help avoid errors in accounting and conflicts with suppliers and contractors. The act of reconciliation is required in the following cases:
1. Before drawing up the mandatory annual financial statements.
2When conducting an inventory of settlements with counterparties.
3. If the supplier provides the buyer payment by installments.
4. Counterparties cooperate for a long time.
5. Significant transaction amounts or frequent and bulk deliveries of goods or services.
Acts of reconciliation and annual reporting
Most of the accounting staff prefers to reconcile settlements with counterparties before submitting annual reports. Thanks to this practice, it is possible to find and correct a lot of accounting errors that could affect the accuracy of reporting. This is especially necessary for large organizations with a large number of different departments. In such circumstances, documents for the purchase of any product, such as office supplies for a department, may simply not be on time in the accounting department.This often happens when the goods are delivered without prepayment at the end of the reporting period. The materials have been received, their shipment is reflected in the accounting of the counterparty, and nothing is known about this in the accounting department of the receiving organization. In the case of prepayment, attentive accountants usually try to find out if there was a delivery and obtain the relevant documents.If the transfer of funds was not and is not expected in the near future, the delivery of goods will not be reflected in the accounting of the consignee. The act of reconciliation with the counterparty allows you to trace whether all documents on perfect business transactions are recorded, as well as to verify the correctness of their reflection. When identifying discrepancies in their data with counterparty data, many employees, along with a reconciliation act signed with disagreements, immediately transmit the missing set of documents. This greatly speeds up the process of correcting errors in accounting.
Each company can develop and approve its own form of the act of reconciliation, which will suit all interested parties, and will allow to conduct an audit correctly. Regulatory acts do not provide for a unified look at this document. But, since it is primary, when it is drafted, all the requirements that are imposed by legislation on the design of this kind of documentation should be taken into account. In particular, the reconciliation statement must have the following details:
2. The date of its formation.
3. Information about the compiler.
4.Summary of the operation.
5. Measuring the specified business transactions.
6. Indication of the positions of persons responsible for the reflection of business operations and their documentary registration.
7. Handwritten signatures of the indicated officials.
The order of filling
The main part of the reconciliation act, which bears in itself information about business operations conducted by counterparties, is a table. It consists of two parts. The left reflects, as a rule, the activities of the organization - drafter of the document. It includes four columns. In the first of them, the sequence number of the record is indicated, in the second - a brief summary of the business transaction, in the third and fourth - its monetary value for debit or credit. The right side of the table remains empty; the data is recorded there by the counterparty when it conducts reconciliation. Thus, in the considered act are made - in chronological order - records of all operations conducted by the organization, with the participation of a specific counterparty, for a certain period. After that, the turnover on debit and credit is calculated, and the final balance on the desired date is determined.
The company that received the reconciliation report from the counterparty compares its accounting data with the information provided by the drafting organization in the document. The date of the business transaction, its type and amount is checked. The accounting officer also checks the balance at the beginning of the period. In case of discrepancies, it is best to first check the correctness of the reflection of documents in their own accounts. This will require raising invoices and invoices submitted by the counterparty or issued to him. If an error is detected, the accounting data are subject to adjustment, after which the reconciliation is performed anew. If the error is not found, the employee indicates his information in the right part of the act, counts the momentum and the final balance. The reconciliation act is sent to the counterparty with discrepancies.
The document must be signed by the head and chief accountant of the company. At the designated place put the seal of the organization. She has to hook the last couple of letters of signatures. In the absence of the head or chief accountant, the reconciliation certificate shall be certified by the signatures of other officials.organizations having the right to sign such documents. This indicates their position.
The act of reconciliation allows not only to identify errors in the conduct of accounting, but also to avoid disagreements with counterparties. If, for example, the organization’s debtor signs the document, then it agrees with the state of settlements and expresses its readiness to pay the debt.