On the Reconciliation Summary page before submitting your Month End Reconciliation you may find that there is a Variance between the Revised balance and Ledger Balance as per Statement.
The 15 steps below will assist you in identifying the root cause of the variance:
- Have you assigned all the non-notifiable debtors and/or invoices that are still outstanding at the end of the month to the correct ledgers?
- Do you have the correct balance from the Bank/Lenders Debtors Control Account?
- Have you included all the invoices within your ‘in transit’ items that have been processed by Bank/Lenders after month end?
- Have you received any cash into your trust account which you have not assigned to an invoice? This may be located by ticking off the cash entries via your debtors control account to the invoices it relates to in your accounting package.
- Have any of your debtor’s cheques which you have previously allocated to an invoice, been returned unpaid but needs reversing back? This should be included on the ‘discounts, adjustments and write-offs’ page.
- Have you created a Debit Journal within the month that has not been advised to Bank/Lenders? This should be included on the ‘discounts, adjustments and write-offs’ page.
- Have you raised any credit notes within the last month which have not been advised to Bank/Lenders?
- Are there any cash receipts/cheques which have been banked after the month-end but have been included/allocated to the present month? This can also be where funds have been incorrectly paid into your current account, and need transferring to the Trust Account.
- Do you have any settlement discounts? If so the value discounted within the whole month will need to be identified. This should be included on the ‘discounts, adjustments and write-offs’ page.
- Have you raised any Write back/Credit Journals this month? These could be in the form of bad debts written off, or a difference within receipts received due to exchange rate differences.
- Does the value of invoices & credit notes uploaded agree with the list of entries that each schedule refers to?
- Have any non-notifiable debtors been incorrectly advised to Bank/Lenders?
- Has any non-notifiable cash been accidentally banked into the Trust Account?
- Have all the prior month’s entries been processed prior to this MER? If not, values still outstanding need to be added back into any values shown this month until they have been processed into your account
- Does all the cash, invoices and credit notes belong to you? Occasionally mistakes can be made and you may need to advise Bank/Lenders to rectify the issue.
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