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Reconciliation of Administrative Claim Accounts Receivable to General Ledger

Policy: 

This is a reconciliation of the F/EA's Accounts Receivable for claims submitted by the F/EA for the F/EA's Administrative Reimbursement.

F/EA reconciles the accounts receivable administrative account <<GL Account Number>> monthly. Reconciliation of this account is completed by the 10th of the month following the month for which the reconciliation is performed. 

The complete reconciliation process is the result of 5 segregated processes. A single individual does not control the entire process.
 
  1. Post Admin Accounts Receivable to General Ledger is done whenever a Administrative fee billing is done or at minimum monthly (See Policy and Procedure Document 21.1)
  2. Reconciliation of Administrative Payments to Billing Claims, performed whenever a payment is received
  3. Post Payments to General Ledger, performed whenever a payment is received or at minimum monthly
  4. Reconcile Accounts Receivable to General Ledger, performed monthly
  5. Results should be escalated to Controller or CFO for claims unpaid for over 90 days or reconciliations not completed within 10 days of month end 
These reconciliations are performed to ensure that the F/EA is accurately and timely submitting Administrative claims to the participant and tracking payments and receivables. 
 
After performing the reconcilation, a reconciliation statement is prepared and signed by the F/EA Accountant (or assigned staff) verified, reviewed by <<Staff Title>> (or assigned staff) who signs the reconciliation and stored at <<File Path>>. Signed reconciliation sheets are stored for a minimum of 7 years per File Retention Policy.
 
 
Procedure: 

Reconcile Accounts Receivable to General Ledger

Performed Monthly
  1. <<Staff Title>> (or assigned staff member) opens billing system
  2. Run aging report
  3.  Copy these results into excel
  4. Sort by bill date to determine aging
  5.  Subtotal accounts receivable to show aging receivable for 0-30 days, 31-60 days, 61-90 days and more than 90 days
  6. The total of aging Accounts Receivable is the current Accounts Receivable balance
  7. Total current Accounts Receivable should match the Accounts Receivable balance in the control sheet saved here: <<File Path>>
  8. <<Staff Title>> prepares an aging report saved here <<File Path>>
  9. <<Staff Title>> provides aging report and supporting documents to <<Staff Title>> for verification
  10. <<Staff Title>> reviews for mathematical accuracy
  11. <Staff Title>> (or assigned staff member) prints ending balance for G/L Account
  12. <<Staff Title>> compares the ending balance from the General Ledger to the aging report prepared by <<Staff Title>>
  13. Any discrepancies must be researched and resolved
  14. <<Staff Title>> completes the Accounts Receivable reconciliation form for account <<GL Account Number>> saved here <<File Path>>
  15. Enter GL Ending Balance for account on reconciliation sheet
  16. Enter aging detail prepared by <<Staff Title>>
  17. The open balance in the billing system must match the ending balance in the GL Account 
  18. Any discrepancies must be researched and resolved
  19. After reconciling the GL ending balance for the month to the billing system open balance, <<Staff Title>> prints the reconciliation sheet
  20. <<Staff Title>> verifies and signs the reconciliation sheet
  21. <<Staff Title>> reviews reconciliation sheet and supporting documents for mathematical accuracy and completeness
  22. <<Staff Title>> signs and dates reconciliation sheet and returns to <<Staff Title>> for storage
  23. <<Staff Title>> identifies all open items for uncollectible claims over X months old
  24. <<Staff Title>> prepares a report of uncollectible claims and submits to F/EA Chief Financial Officer
Internal Controls: 

The internal controls used by F/EA to monitor this process establish responsibility, segregate duties, document procedures and ensure independent internal verification.

  1. <<Staff Title>> reconciles supporting documents to ensure billing is submitted accurately and timely and payments are applied to claims accurately and timely.
  2. <<Staff Title>> creates journal entry templates.
    • Each journal entry template is used as a control document.
    • Each reconciliation document is prenumbered
    • <<Staff Title>> signs and dates verifying accuracy
  3. <<Staff Title>> reviews supporting documents and journal entry template for completeness and mathematical accuracy.
    • F/EA Accountant signs and dates journal entry template.
  4. <<Staff Title>> reviews supporting documents and journal entry template for completeness and mathematical accuracy.
    • <<Staff Title>> signs and dates journal entry template.
  5. <<Staff Title>> reconciles General Ledger to appropriate supporting documents at each month..
  6. <<Staff Title>> produces reconciliation documents, verifies, signs and dates.
  7. <<Staff Title>> reviews, verifies, signs and dates reconciliation documents
  8. CFO or Controller reviews uncollectible items after <<Staff Title>> prepares and <<Staff Title>> verifies for accuracy.
  9. All control documents are password protected and access is restricted to F/EA Assigned staff with responsibility for account reconciliations.