Account Reconciliation Cloud Services

I. Overview
II. Navigation
III. Configuration
IV. Rules

I. Overview
➢ Objectives:
a) General Ledger
b) Reconciliation
c) Reconciliation process prior to ARCS
d) ARCS - Solution Highlights
e) Compliance
1. Key Concepts
2. 5 step process
3. Methods
f) Transaction Matching
1. Key Concepts
2. Methods
a) General Ledger: A means to record all the financial transactions of the business. It has sub ledgers that
records all the transactions like Expense, Revenue, Asset and so on. These transactions are captured in
journal entries mostly done by the accountants of the business.
Example: When a business requires a computer to record the transactions and makes a purchase it is
recorded as
Description Debit Credit Total
Computer (Fixed Asset) 65000 65000
Bank 65000 65000
Difference -

b) Reconciliation: Process of validating the values in a series of financial transaction and make necessary
changes to balance the transactions. Example: When a business has made revenue of 100K in 1st
Quarter of the Fiscal year. It is reconciled by identifying, if the breakdown values of the three months
of that quarter adds up to the total of 100K. Mostly reconciliation is done for Bank GL Vs Bank
Statement, AP, AR.
c) Reconciliation process prior to ARCS: Prior to the ARCS every business conducts the reconciliation
process periodically to ensure there is no flaws in the records. This is done by ensuring that balances of
the accounts are matching with it’s respective subledger’s and in some cases other source.

The process is initiated by the Manager and intimated to the relevant personnel for this activity, when
the accountant/preparer is done with the changes, or it is sent to the reviewer and then to Manager
for approvals of the closing and accessed during the audit.

d) ARCS Solution Highlights: Reconciliation compliance is done on a period balance.

Transaction matching, however, is a more complex (large scale) process that involves more of an
operational reconciliation of the financial transactions. ARCS helps do this effectively. This feature is a
separately licensed and must be subscribed additionally. ARCS ensures that the balances are reconciled
for the financial transactions. Multiple users can be assigned with specific tasks and when done can be
reviewed. This workflow can be configured as per business requirement. The users are notified of the
timeline to complete the tasks. Dashboard provide clear status, and possible risks Administrator sets
up the list needs reconciliation.
e) Compliance: Terminologies –

Account Reconciliation: Definition

Aging Buckets: Aging Reports

Aging Profile: Collection of Buckets.

Period: Choose the period of Recon

Frequency: Freq of the recon to be done, which is defined in the system settings

Profiles: It must exist before creating recon. This specifies the settings how and when the recon occurs.

Source Systems: This contains the data which is to be reconciled for the transactions and the balances.

The Reconciliation Process

 •The Data Load
is usually done
Data Load by the
Administrator

•Followed by Auto Recon

for conducting automatic
Auto recon for A/c ID's, that
satify the conditions. 0
Reconciliation Balance & no activitiy
a/c's.

•The Status changes from

Pending to Open to the
Notfiication "Preparer" which happens
after setting period status
to open.

•The Preparer
goes on to
reconcile the
Preparer a/c id's
assigned to
them

•The Recon is
submitted to the
Reviewer Reviewer for final
approval or
reject/additional info.
•The admin
monitors the
system activity
for
Monitor abnormalities
such as
progress/dela
ys

Compliance Process Steps

 Load Balances

Automation Executed

Prepare Reconciliation

Review Reconciliations

Load Balances:

Balances from the source system and subsystems are loaded.

The loaded data gets validated on loading and the load is scheduled at the user convenience.

Prebuilt integration with ERP systems.

Automation Executed:

Auto recon occurs after data load. Data must exist for all buckets before the auto recon could
work.

Prepare Reconciliations:

Prepare recon’s using configurable formats

By explaining the account balances in case of account analysis recon or by source system and
subsystem in case of balance comparisons, used in reconciling the balances with the sub
ledger.

Variance Analysis

Reconciling Period to Period variance in account balances.

Review Reconciliation:

Provide Comments and attachments if necessary

When the reconciliation is completed, it is submitted for reviewer and when there is no
reviewer status is changed to closed. Once the Recon is approved and closed comments can’t
be changed.

To approve must answer the questions and values for custom attributes.

Upon rejection the responsibility passes back to the preparer and the status reverts back to
open with comments to the rejections.

Monitoring Process:

Overview Dashboards

Workflow notifications sent to users based on the setup.

Reconciliation Compliance Methods:

ARCS Supports following methods: Balance Comparison, Account Analysis & Variance Analysis

Balance comparison compares the balances with the account balance with the sub ledger. The
diff is adjusted by the preparer from the adjustments tab.
A/c Analysis method is used for a/c’s which has no comparative balance. The balances are
justified by validating each line item of the balance of any account that needs this type of
recon. These transactions are called the explained balance. Any difference is recorded in
adjustments tab.

Variance Analysis method used when the explanation is required for change of balances in any
account. Usually done against period (Month on Month or Qtr. on Qtr.) Explanation is
provided when there is diff.
Transaction Matching:

Key Concepts:

Transaction Matching: Automate High Volume and more complex reconciliations. Matching
cane be integrated among multiple data sources.

Reconciliation Type or Match Type: Companies can create a separate type of recon for each
account.

Data Source: Multiple sources can be utilized.

Timing & Freq: Transaction matching requires to be conducted on a different frequency based
on the account. It can be required to be done every day or monthly

Matching Rules: rules can determine how its made or the threshold level for differences.

Common rules: 1-1, 1-xxx, xx-1 & xxx - xxx

 Create Reconciliations:

1 2 3 4

1. Load 2. Run Auto 3. Confirm Suggested 4 Create Manual 5. Run Balancing

Data Match Matches matches Reports

Balance Comparison with TM: Example: AP Bal with the sub ledger
Account analysis with TM: Example: Creditor ledger Matching (Dr=Cr).
Transaction Matching (TM): Matching just the transactions not considering any period.
 Account Reconciliation Cloud Services - Configuration

Pre configuration requirements:

Decision on system configuration and data required.
Setup and Reconciliation Tasks

Select configuration to create necessary attributes (User defined fields used in transactions &
profiles).
➢ Alert Type

➢ Attributes

➢ System Attributes

➢ Currencies

➢ Data Loads

➢ Filters

➢ Formats

➢ Lists

➢ Organizations

➢ Periods

➢ Settings
Alert Types:

Attributes:
System Attributes:

Profile Segments: No of profiles used in the application

Process: to find the recon process in effect.
Risk Rating: Select the risk rating
Frequencies: the frequencies of the reconciliation
A/c Type: Select the type of account to be reconciled.
Aging Profiles: Contains the aging categories for the reconciliation.

Foreign Exchange Translation activities:

Data Load:
Filters:
Formats:

Profiles: