Zeevo Tips:
Reconciliations play a critical role in the overall financial statement close process.

Zeevo explores approaches to completing timely and accurate account reconciliations.

It is important to examine the contents of the balance sheet accounts to verify that the recorded assets and liabilities are supposed to be there. It is quite possible that some items are still listed in an account that should have been flushed out of the balance sheet a long time ago, which can be quite embarrassing if they are still on the books when the auditors review the books and records periodically and at year-end.

Here are several situations that a proper account reconciliation would have caught:

  • Prepaid assets.

    The legal team pay a retainer to a law firm for a potential repossession that never occurs. During a year end review of the balance sheet the balance was noticed. Upon investigation, the retainer had been repaid but inadvertently posted as a credit to legal expense. A correction to increase legal expenses and remove the prepaid asset was required.

  • Accrued revenue.

    A company accrues revenue of $50,000 for a services contract, but forgets to reverse the entry in the following month, when it invoices the full $50,000 to the customer. This results in the double recordation of revenue, which is not spotted until year-end. The controller then reverses the accrual, thereby unexpectedly reducing revenues for the full year by $50,000.

  • Depreciation.

    A company calculates the depreciation on several hundred assets with an electronic spreadsheet, which unfortunately does not track when to stop depreciating assets. A year-end review finds that the company charged $40,000 of excess depreciation to expense.

  • Accumulated depreciation.

    A company has been disposing of its assets for years, but has never bothered to eliminate the associated accumulated depreciation from its balance sheet. Doing so reduces both the fixed asset and accumulated depreciation accounts by 50%.

  • Accounts payable.

    A company fails to register invoices in their system prior to sending original invoices out for approval. At year end, when the Auditors confirm the Creditors balances, many discrepancies were discovered. This led to a further discovery that the accrual process was also inadequate. It resulted in an increase of expenses and balance sheet adjustments.

These issues and many more are common problems encountered at year-end.

To prevent the extensive embarrassment and error corrections caused by these problems, Zeevo explores a number of leading practices, offering your business tips on how to effectively conduct account reconciliations every month for the larger accounts, and occasionally review the detail for the smaller accounts, too.

Submit the form and download Zeevo Tips on Account Reconciliations.

Account Reconciliations Zeevo Group

Request the Download
and receive tips on streamlining
your account reconciliations

You will be redirected to a download page.
Please check your email inbox for a password.

    ERP system

    ERP other

    CRM system

    CRM other

    TMS (treasury management system)

    TMS other

    Reconciliation system

    Reconciliation other

    Lease/Asset Management system

    Lease/Asset Management other

    After you click submit, you will be redirected to a download page and receive a password by email. If you don’t receive the message containing the password, please check your spam filter.