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General Ledger Account Reconciliation Guidelines-Unrestricted

Departments that process transactions to General Ledger (also known as Balance Sheet) accounts codes are responsible for reconciling the balances in those account codes on a monthly basis.  General Ledger accounts to which departments might process transactions consist of Assets (account codes beginning with “A”) and Liabilities (account codes beginning with “L”).

Common General Ledger account codes that might be used by a department include:

Accounts Receivable (A226)
Prepaid Expense (A900)
Other Accrued Payables (L110)
Deferred Revenue (L3G0)
Deposits and Funds Held for Others (L3J1)

Before processing any transactions using these or any other Asset or Liability account codes, contact Unrestricted Accounting – Main, or Unrestricted Accounting – HSC for guidance.

What an account reconciliation IS:

            A comparison of the General Ledger balance as of a certain date to a credible, independent or related source of information.

What an account reconciliation IS NOT:

            Listing and totaling the transactions that have posted in Banner. 

These guidelines are intended to show departmental personnel how to find their General Ledger balances in Banner, and how to reconcile those balances.

Locating General Ledger account code balances:

Transactions that are posted to General Ledger account codes do not appear on the Operating Ledger report for an Index; only Revenue and Expense account codes appear on the Operating Ledger reports.  To view your General Ledger account code activity in Banner, you need to know the Banner Fund that is associated with the Index that was used to process a transaction.

To determine the Fund, on Banner screen FTMACCI, enter a query using the Index number used to process the transaction.  Execute the query, and make note of the Fund.  Once the Fund is known, enter it on screen FGITBAL to view the account code balances.  Drill down to FGIGLAC to see the detailed postings for a particular account code.

The best source for the final month-end General Ledger balances is the report FGRGLDS “General Ledger Detail and Summary” in MyReports.  Run this report after receiving notification that the month is closed.  Chose the Summary option for the particular month.  Note that when entering the Fund, you need to select Fund Level 3.

Independent Source of Transaction Detail

The Banner account code balances must be compared to a source independent of Banner, in order to determine if any discrepancies exist, or adjustments are needed.  The reconciliation technique used may vary depending on the type of account being reconciled.  Using the accounts code mentioned above as examples, the reconciliation methodology and independent source of information used could consist of:

Assets:

Accounts Receivable:

  • When a department sells goods or provides services before receiving payment (sales “on account”), revenue is credited, and Accounts Receivable is debited.  Departments should keep a file of outstanding, unpaid invoices or maintain a supporting receivable listing (aging schedule) of unpaid invoices by customer (patient, student, etc.), or both, in order to track accounts that have not been paid.  Either source should be updated as appropriate when payment is received, and all payments received “on account” should be credited to Accounts Receivable when deposited via a Money List in Banner.  Click here for a sample Excel reconciliation of accounts receivable.  You may save a copy to your desktop, to use as a template for completing your reconciliation.
  • Please note that if a department has more than just incidental, infrequent outside billings, they should use the Non-Student Accounts Receivable billing process available in Banner.  Click here for details.

Prepaid Expense:

  • Prepaid Expenses are recorded when UNM makes a payment to a vendor before the benefit of the payment is received.  The Prepaid Expense account code is charged when the payment is made, and Accounts Payable is credited.  The department should keep a listing of vendor invoices that were charged to Prepaid Expense, with the amounts and date that the payment should be charged to expense noted on the listing.  At the point the expense is incurred, the reconciler should ensure that the appropriate JV is submitted, crediting Prepaid Expense and debiting the appropriate expense account code, that the JV number is noted on the invoice listing, and the prepaid amount on the listing is reduced or zeroed out accordingly.  Click here for a sample Excel reconciliation of prepaid expenses.  You may save a copy to your desktop, to use as a template for completing your reconciliation.

Liabilities:

Other Accrued Payables:

  • Accrued Payables are recorded via JV when goods or services have been received, but the vendor has not yet invoiced the University for payment.  Because the benefit has been received, a debit entry to expense is necessary, with an offsetting credit to Accrued Payables. At the time the vendor does invoice for goods or services, the Accrued Payable entry should be reversed, as the invoice will generate a new entry to expense, and a credit to Accounts Payable.  Failure to reverse the accrual will result in duplicate expense charges, as well as an Accrual that has now been paid still being on the books.  Departments should keep a separate listing of expenses that they have accrued, and note when the invoice is received and paid, so that the accrual entry can be reversed at that time.

Deferred Revenue:

  • When customers pre-pay UNM for goods or services, the payments received should be recorded as deferred revenue when received and deposited (debit cash, credit deferred revenue). An example would be advance ticket sales to an athletic event.  When the services or products are provided, the deferred revenue should be reclassified to revenue on the income statement (debit deferred revenue, credit revenue).  Proper reconciliation of the General Ledger balance would include a detail listing of customers, payment dates, and when the product or service pre-payments will be adjusted to revenue.

Deposits and Funds Held for Others:

  • Departments might receive deposits from customers, students, or even employees, which may ultimately either be refunded, or applied to revenue, depending on the nature of the deposit.  Examples are seating deposits paid by students, key deposits paid by employees, or a deposit paid by an outside entity for an event at the SUB.  Since each of these cases represent a liability of the University until some future event occurs, deposits received should be recorded in this account code until the future event occurs.  Reconciliation procedures would consist of listing the depositor, the date the deposit was received, amount, and when the deposit could be returned to the depositor, or taken into revenue.  Click here for a sample Excel reconciliation of key deposits.  You may save a copy to your desktop, to use as a template for completing your reconciliation.

The goal of the General Ledger account code reconciliation is to be able to show what makes up the balance in Banner at any point in time, and to ensure that the Balance is correct.

For all General Ledger account codes, the total of the appropriate secondary, independent sources, as described above, should be compared to the Banner ending balance for the month.  Any discrepancies should be investigated, with the reasons noted.  Any adjusting entries that are needed as a result of the reconciliation should be completed before the end of the following month.

Reconciliations should most commonly be completed on Excel spreadsheets.  When completing the reconciliation, reference the Banner Fund number (not the Index) and account code being reconciled, as well as the month and year.  The completed reconciliations should be forwarded to Unrestricted Accounting, via e-mail, by the 25th of the month following the month being reconciled.  The June reconciliation (last month of the fiscal year) is due by July 10.