Why do we need an reconciliation report?

The act of reconciliation of mutual settlements between legal entities is a fairly common document. Perhaps not all accountants realize its importance, but in order to avoid misunderstandings and unnecessary mistakes, it is necessary to periodically communicate with counterparty accounts. By signing the reconciliation act, the debtor recognizes its debt. On the reconciliation act, the date of reconciliation of balances on the accounts is indicated, therefore, if the dishonest debtor refuses to settle with you, in court you can present the verification certificate signed by the authorized representative of the counterparty and thereby show the existence of the debt.

There are several situations in which there is a need for an act of reconciliation. Firstly - when granting a delay to the buyer. The delivery contract clearly specifies the length of the delay, and at the end of it - or even a few days before the expected payment date - the supplier can gently "remind" the customer that the payment deadline has come. The reconciliation act is also necessary if the partners cooperate for a long time and deals are made often, and the assortment of the goods sold is quite wide. In this case, it is necessary to check periodically, if only because due to numerous shipments, frequent goods arrival, multiple transfers of money, the accountant can get elementary confused. And if you see that the amounts of balances with your organization are the same for the counterparty - you can be sure that everything is doing right. Thirdly, the reconciliation act must take place at high sums of money turnover. In order not to damage the financial position of the company, you need to do everything to exclude annoying mistakes and shortcomings.

The form of the reconciliation act is not fixed in the legislation. When composing it, it is necessary to make a selection of all the accomplished business transactions between two legal entities (these are payments, sales and purchase of goods, raw materials, services, everything that is documented and signed by both parties). At the beginning of the register, the reconciliation act indicates the balance at the beginning of the period for which reconciliation is carried out, if any. Then show all receipts in monetary terms and sum up - the debt in favor of one of the organizations or the zero balance - when all the calculations are performed.

Mandatory requisites for registration of the reconciliation act, in addition to the press, are the signatures of the heads of the companies that are being verified. By putting his resolution, the head of the firm confirms the reliability of the information specified in the reconciliation report.

The reconciliation act is made in two copies, on both the signature of the accountant responsible for drawing up the act, the chief accountant (it can be the same person) and the head is put. Both copies are sent to the second party so that they confirm the truth of the information in the act and also sign and seal.

It is advisable to check the calculations for the end of the month, quarter, year, because when compiling various accounting reports in them, you need to specify the amount of accounts receivable and accounts payable.

Modern accounting software allows you to quickly select all accounting accounts and compile reconciliation, so you do not have to dig into the archive, looking for all invoices, bills, payment orders.

Remember that you can not force the organization you are checking to sign a reconciliation report, and if they do not want to recognize the debt to you, they may not return the act you sent. Therefore, take care that in the act of reconciliation it was written that if the party that made up and sent out the reconciliation report to the other party does not receive its copy of the act after a certain period, the balance (balance) will be deemed to be confirmed.