16 October 2011
The following steps to be undertaken for an AP reconciliation: 1. Obtain the Account payable party statement as per their ledger. 2. Start comparing entries in the statement with the entries in your ledger one by one. Note down the ones with amount variation as well as other qualitative variations like invoice no/Inv date etc different. 3. Complete this exercise for the entire period under reconciliation. 4. Short list the entires into 4 parts. a. Debit entries in your ledger not figuring in party statement b Credit entries in your ledger not figuring in party statement c. Debit entries in party statementnot figuring in your ledger d.Credit entries in party statementnot figuring in your ledger 5 Once again cross compare the missing entries i.e Debit entries in your ledger missed out vs Credit entries in party statement missed out. and vice versa. 6. Once you have frozen the items of reconciliation, enquire into the nature of each entry and the reason why it is missed out
7. Pass entries which are required to be passed in your book arising out of the above exercise ( under due authority of course) 8. Prepare reconciliation statement.
Rememeber that a good reconciliation is that which clearly identifies the reasons for the differences between the two balances sougt to be reconciled. Have a nice day:-)
CAclubindia
