Prewritten Accounting Procedures For Easy Internal Controls

The Bizmanualz Accounting Policies and Procedures Manual can help you establish
a strong internal control system and comply with Sarbanes-Oxley section 404. With
these prewritten accounting procedure templates, you will learn how to improve
accounting department controls for Sarbanes-Oxley 404 compliance, how to
improve the performance of business finance and credit, how to manage shipping,
purchasing and receiving, and how to manage cash operations.
Whats Included?

Accounting &
Bookkeeping
Procedures for Internal
Control
US $595
Includes six (6) modules:
1. Introduction and Table of
Contents
2. Guide to preparing a well
written manual
3. A Sample Accounting
Manual covering common
requirements and practices
4. 38 Policies & Procedures
and 54 corresponding forms
5. Embezzlement Prevention
Supplement
6. Complete Index

Choose your delivery option:

Hard Cover Book plus
CD containing all documents
in editable Microsoft Word
format and instant download
or
Instant download only (no
shipping)

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By Phone: 314-863-5079
800-466-9953
By Fax: 314-863-6571

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38 Prewritten Policies and Procedures

Chart Of Accounts
Files And Records Management
Travel And Entertainment
Management Reports
Period-End Review & Closing
Controlling Legal Costs
Taxes And Insurance
Property Tax Assessments
Confidential Information Release
Document Control
Cash Drawers And Credit Cards
Cash Receipts And Deposits
Problem Checks
Wire Transfers
Check Signing Authority
Check Requests
Bank Account Reconciliations
Inventory Control
Inventory Counts
Fixed Asset Control

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Customer Property
Fixed Asset Capitalization &
Depreciation
Sales Order Entry
Point-Of-Sale Orders
Customer Credit Approval And Terms
Sales Order Acceptance
Shipment Of Goods
Invoicing And Accounts Receivable
Sales Tax Collection
Progress Billing
Account Collections
Customer Returns
Vendor Selection
General Purchasing
Project Purchasing
Receiving And Inspection
Shipping And Freight Claims
Accounts Payable And Cash
Disbursements

54 Forms and Records

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Account Codes
Master File Guide Index
Records Retention Periods
Travel Arrangements Form
Travel And Miscellaneous Expense
Report
Entertainment And Business Gift
Expense Report
Department Reporting Summary
Daily Flash Report
Weekly Financial Report
Six Week Cash Flow Report
Budget vs. Actual Report
Financial Statements
Tax Calendar of Recurring Monthly
Dates
Non-Disclosure Agreement
Request For Document Change
Document Change Control
Daily Cash Report
Deposit Log
Bad Check Notice
Bank Wire Instructions
Wire Transfer Form
Check Signing Authority Log
Check Request
Sample Bank And Book Balances
Reconciliation
Inventory Requisition
Inventory Count Sheet

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Inventory Tag
Capital Asset Requisition
Asset Disposition Form
Bill Of Sale
Material Return Notice
Sales Order
Order Form
Phone Confirmation Checklist
Credit Application
Request For Credit Approval
Credit Inquiry
Shipping Log
Commercial Invoice
Invoice
Accounts Receivable Write-Off
Authorization
Account Collection Control Form
Returned Goods Authorization
New Vendor Notification
Vendor Survey Form
Purchase Requisition
Purchase Order
Purchase Order Log
Purchase Order Follow-Up
Daily Sundry Payable Log
Order And Arrival Log
Receiving Log
Receiving and Inspection Report
Inventory Inspection Levels

Accounting & Bookkeeping Procedures for Internal Control

Document ID
CSH107
Revision
0.0
Effective Date:
mm/dd/yyyy

Title
BANK ACCOUNT RECONCILIATIONS
Prepared By
(name, title)
Reviewed By
(name, title)
Approved By
(name, title)
Applicable Standard: N/A

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Print Date
mm/dd/yyyy
Date Prepared
mm/dd/yyyy
Date Reviewed
mm/dd/yyyy
Date Approved
mm/dd/yyyy

Policy:

To ensure the accuracy of the companys bank account records by proving

the monthly balance shown in the banks Account Register.

Purpose:

To outline the practices for preparation of a Monthly Bank Reconciliation

Scope:

This applies to all bank accounts maintained by the company.

Responsibilities:
CFO is responsible for review and approval of all reconciliations.
Controller is responsible for reconciling all checking accounts.
Background: Errors or omissions can be made to the company's bank account records
due to the many cash transactions that occur. Therefore, it is necessary to
prove the monthly balance shown in the bank account register. Cash on
deposit with a bank is not available for count and is therefore proved
through the preparation of a reconciliation of the company's record of cash
in the bank and the bank's record of the company's cash that is on deposit.
Definitions:

Batch. All of the days credit card transactions are collected into a batch
of transactions. The batch is closed, usually at the end of the day, and the
result is submitted to the merchant processor as a single batch.
Settlement. The processor clears the credit card transactions in the batch
and the result is settled to the designated bank account. Settlement
varies by Credit Card Company but usually occurs in 2-3 days after a batch
is closed.
Processor. The processor is responsible for authorizing credit card
transactions and settling each batch. The processor is also the company
that one must interface with on all discrepancies or chargebacks.
Chargebacks. A chargeback occurs when a customer (cardholder) disputes
a charge that appears on their monthly credit card statement. If the dispute
is unable to be resolved then the transaction is charged back to the
merchant. The processor charges the merchant and returns the
cardholders money.

Sample Procedure

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Procedure:
1.0

BANK STATEMENT PREPARATION

1.1

After receipt of the monthly bank statement, including cleared checks, deposit slips
and any other transactions; the Controller should prepare the monthly bank
reconciliation and have it carefully reviewed by the CFO. The CFO review is
especially important if a bookkeeper is hired to perform other cash drawer or cash
posting transactions. To preserve proper segregation of duties, no single
employee, other than the owner, should perform both cash transaction functions
and bank account reconciliations.

1.2

Prior to preparing the bank reconciliation, the accountant should review the bank
statement for any interest credits, bank charges and other fees. These should all be
posted to the checking account before reconciling. Note: some accounting
systems allow for the entry of interest credits, bank charges and other fees during
the reconciliation process.

2.0

COMPUTERIZED FORMAT

2.1

In the computerized environment, the accounting system may provide an

automated bank reconciliation task. This task is generally selected once a month in
conjunction with receiving the month end bank statement. Once selected, the
screen shows a list of all items that have been posted to the cash account and that
have not been cleared from the previous month's account reconciliation. The
screen is usually divided into two segments: one half is a list of all checks and
other charges reducing cash, and the other half is a list of all deposits and other
items increasing cash. This screen would also have a field for entering the proper
month end date and the balance at month end, per the bank.

2.2

After the account-reconciling task is successfully completed, a report is provided

which shows the reconciliation process, including outstanding checks and deposits
in transit. The actual format will vary depending on the accounting system, but in
general, will contain the same information as shown on the manually prepared
report in CSH107 Ex1 SAMPLE BANK AND BOOK BALANCES
RECONCILIATION TO CORRECTED BALANCE.
Note: Print out the full (not a summary) report, staple it to the applicable bank
statement, and file the result as an important control feature. This will document
that the bank statement has been successfully reconciled.

3.0

MANUAL PREPARATION AND RECONCILING ITEMS

3.1

A monthly bank reconciliation starts with the ending bank statement balance. List
any deposits in transit that were made but were not yet recorded by the bank and
add to the bank balance. Then, list any checks that were written on the account
prior to month-end, but which have not yet cleared the bank and deducted from
the bank balance. The ending balance should agree with the balance "per books",
i.e.: the balance recorded in the checking account.

Sample Procedure

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Accounting & Bookkeeping Procedures for Internal Control

3.2

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Now perform the same process with the monthly reconciliation of the ending
balance per the company's books.
Total deposits and total disbursements should be reconciled to the bank statement,
then adjustments such as any interest or any other bank credit items should be
listed and added to the balance. Then, any bank charges, transfer fees, etc. should
be listed and deducted from the balance.
From these steps, the "corrected" ending book balance is derived and should
equal the "corrected" bank balance from the previous step.

3.3

Any discrepancies between the derived balance and the checkbook balance will
require research to determine the cause, such as recording errors, omissions,
incorrect postings, etc. In some cases, the discrepancy can be caused by not
accurately entering all bank generated credits and charges; such as fees, interest,
etc. If the balances still do not equal, the bank statement should be carefully
reviewed for possible errors; such as, checks or deposits clearing for amounts that
do not agree with those posted to the store's checking account.

4.0

COMPUTERIZED PREPARATION AND RECONCILING ITEMS

4.1

The same procedures as the manual tasks described above are followed in a
computerized environment. The primary difference is in the ease of preparation.
All transactions, which were not already cleared in the prior months
reconciliation, are listed.

4.2

Start by checking or clicking off with the mouse or keyboard those transactions,
(mainly checks and other debit memos, and deposits and other credit memos) that
agree with the bank statement. Once all bank statement items have been found and
clicked off on the screen, the remaining "un-cleared" entries on the screen are, in
effect, the list of outstanding checks and deposits in transit.
Furthermore, the screen typically provides a continually updating reconciled cash
amount that should agree to the ending bank balance amount once all items are
correctly accounted for and cleared. Usually the accounting system does the math
and the screen displays both the ending bank balance and the reconciled cash
amount with the remaining difference, if any.

4.3

Investigate all differences and enter any adjustments to the reconciliation or post to
the cash account in order to ensure an accurate bank balance.

5.0

ADJUSTMENTS AND OTHER TROUBLESHOOTING

5.1

In spite of the best of efforts, the reconciliation result may not agree with the bank
balance. The obvious first step is to make sure that all checks and deposits on the
bank statement agree with the entries in the cash account. Discrepancies of this
type are usually rare in computerized environments but may be caused by
improperly recording manual checks or credit card deposits and fees.
Checks are generally posted and printed simultaneously so that what shows up in
the accounting system will always agree to what was processed through the bank.

Sample Procedure

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Deposits are another matter. The bank might group deposited checks differently
than they were in the accounting system. As explained in more detail in procedure
CSH101 CASH DRAWERS AND CREDIT CARDS.
To simplify the month end reconciliation, receipts should be batched in a total
deposit amount that agrees to both the accounting system and the bank. Make sure
to print a totaled deposit report when daily receipts of checks and cash are batched
for deposit. After making the bank deposit, staple the validated bank deposit slip
to the deposit report. This will document the two events: 1) what was deposited
per the accounting system, and 2) what was actually deposited in the bank. These
two amounts must agree. This helps eliminate deposit errors for check and cash
receipts.
5.2

A more difficult reconciling task is in obtaining agreement of all credit card

receipts. The difficulty results from three unique situations. First, there is a time
lag of several days between the time the credit card transaction occurred in the
store and the time it is settled or deposited to the store's bank account. Second,
depending on the type of credit card and/or the merchant provider, the fee charged
(typically 1% to 4%) on each transaction may be automatically deducted from the
deposit before it shows up on the bank statement. And third, chargebacks are
usually deducted immediately by the processor and only reversed if the dispute is
resolved in the companys favor. This may even occur before the chargeback
notice has arrived in the mail.
Consequently, the deposit on the bank statement may not agree with the daily
credit card batch (receipts). In the face of these difficulties, the CFO and
Controller should thoroughly understand the particular credit card daily closing
procedures. An end of day report for each credit card closing should be printed
and saved as a reference for the month end reconciliation process.
Alternatively, the credit card processor will provide a month-end statement listing
each credit card batch submitted each day. This report can be used to reconcile
the credit card batches to the settlement deposits.

5.3

After reconciling checks and deposits, the next area to reconcile are bank
generated Credit and Debit memos. These can result from various events
including, returned checks, returned check charges, monthly bank activity charges,
credit card merchant fees, charges from the use of debit cards, interest income and
other service charges. The CFO may not know many of these until the bank
statement is received. Each one of these entries must be entered and distributed to
the proper income or expense account. Whatever the accounting system, its
reconciling program usually provides a routine for entering these end of month
bank credits and charges.

5.4

After agreeing all checks and deposits and entering all other bank credits and
charges, the balance per accounting system and reconciled bank balance should
agree. Any remaining difference must be investigated. If there is no other
explanation, an adjustment should be made. This would be entered as a bank
charge or credit and posted to a miscellaneous account.

Sample Procedure

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Accounting & Bookkeeping Procedures for Internal Control

5.5

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Any outstanding checks or deposits in transit over six months old should be
reviewed for disposition including write-off by a journal entry.

Revision History:
Revision

Date

mm/dd/yy

Sample Procedure

Description of changes

Requested By

Initial Release

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Sample Procedure

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CSH107 Ex1 SAMPLE

BANK AND BOOK BALANCES
RECONCILIATION TO CORRECTED BALANCE

Account No.
For Month Ended XX/XX/XX

Reconciliation of Bank Balance

Ending balance per bank statement

$10,000.00

Additions:
Deposit in transit
Deductions:
Outstanding Checks
# 1003
# 1232
# 1235

2,500.00

150.00
325.00
1,275.00
1,750.00

Ending balance per checking account

$10,750.00

Reconciliation of Book Balance

Ending balance per books

$10,750.00

Additions:
Interest
Deductions:
Bank Charges
Wire transfer fees

100.00

70.00
30.00
100.00

Corrected Balance

Sample Procedure

$10,750.00

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