The Fast Close Toolkit

CHAPTER FOURTEENSample Policies for the Transaction Accumulation, Reconciliation, and Sub-Ledger Close

INTRODUCTION: THE FOLLOWING SECTION provides sample policies to be considered for the Transaction Accumulation, Reconciliation, and Sub-Ledger Close process. The following policies are included:

1. Account Reconciliation Policy
2. Accounts Payable Accruals
3. Spreadsheet Controls

POLICY 1: ACCOUNT RECONCILIATION POLICY

Introduction: This policy establishes the standards for ensuring that the company performs account reconciliations in compliance with management's objectives, generally accepted accounting principles (GAAP), and internal control requirements.

The purpose of this policy is to define the requirements for balance sheet reconciliations, and to communicate those requirements to those responsible for completing the reconciliations.

It is a key responsibility of all divisional and functional finance and accounting directors/controllers to monitor their balance sheets to ensure that these financial statements accurately reflect business results. This responsibility should be accomplished by implementing and following a formal process which ensures that all balance sheet accounts are reconciled regularly and in a timely and consistent manner. (Refer to Tool 12, “Closing Schedule Templates.”)

i. General Policy

In general, an account is considered reconciled if documentation is provided that the account balance accurately reflects the underlying asset, liability, or equity ...