Big Improvements in Bank Reconciliation

by Kristie Dunne

It works on the simple theory that a bank deposit should ‘match’ or equal the cash transmittal amount. Led by Jeff Follman, Financial Accounting’s Bank Reconciliation Group consists of Nabil Girgis, Misty Hayes, and Evelyn Jagoring. They are responsible for the reconciliation of the three main bank accounts plus various small accounts. Typically, monthly volume for all of these accounts is 5,000 transactions and $290 million dollars.

Payables Administration’s Access Database automatically matches the items that are equal. It is the ones that do not match that cause the problems. In November of 2000 there were approximately 4,599 items that were unreconciled (a bank deposit did not have a matching cash transmittal entry or vice versa, including unidentified ACH & incoming wires). That reconciliation was completed in March of 2001, just four months later. Currently we have approximately 150 unreconciled items. Reconciliations are completed within 10 days after the month end final close.

There are many reasons for this transformation. The employees of the department have worked very hard to clean up and reconcile old items as well as staying current. There have been many technological improvements which have made the reconciliation process easier as well as easing the workload of the departments.

Student Fiscal Services, in partnership with the Bank Reconciliation Group, developed a system whereby financial data can be downloaded from the bank and a cash transmittal could be created and budgets credited automatically. This process has been used for over a year on credit card transactions and will expand in March 2003 to direct depositors such as departments who deposit cash directly to the bank as opposed to Student Fiscal Services, in March 2003. The partnership saves in creating a cash transmittal on a daily basis and ensures that the amount is error free. Moving from a manual to an automated process has greatly reduced the number of errors. The savings have resulted in the elimination of 800 paper cash transmittals. When the process is extended to direct depositors it is expected to have a tremendous effect as well.

Heidi Berrysmith, Computing and Communications, has been working with the Bank Reconciliation Group to help departments utilize FASTRANS for cash transmittals. This process allows the department to input data directly into FAS without having to prepare a paper cash transmittal and eliminate the need for someone to key the information into the system. Several departments utilize this process and it has helped eliminate errors as well as reduce paper.

The Bank Reconciliation Group and Payables Administration have worked with Computing and Communications to implement Positive Pay. This system allows us to easily manage payment activity and reduce the risk of check fraud. As checks are presented for payment, they are matched to the daily transmission to ensure that they are proper checks. Bank Reconciliation Group and CeCe Redila with the back-up help of Cathy Sleipnes and Karen Long send a payment file to the bank daily and we are able to view the exception items the next day. In the past, we sent the payment file to the bank at the end of the month. Although the Bank Reconciliation Group has just started the process in January 2003, we have already stopped 12 fraudulent checks from being paid.