Question

What are the major issues with Reconciliation?

Answer 1

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Some common reconciliation problems and how to resolve them are discussed below.

•Voiding a check caused an unreconciled difference for the amount of the check on my report.

•An unreconciled difference on the report matches the amount of a returned check.

•Ending balances incorrectly entered

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Answer 2

Answer:

♠  One of major challenges in doing a reconciliation is that both parties involved may have different nomenclature of storing the invoice numbers, while the implementation has a hard match around invoice number.

Explanation:

➩  The invoice number that the purchaser has recorded does not match with seller’s invoice received in 2A. Both follow a different convention.

➩  The purchaser may work in multiple states, and the seller has raised invoice with another GSTIN/HQ GSTIN instead of the actual purchaser GSTIN. In this case it might not reflect completely at a GSTIN level.

➩  The invoice date by purchaser doesn’t match with seller. Difference because of date of recording the invoices is different at both places. Mostly purchaser at fault here as they should’ve entered the same date as in Sales invoice.

➩  The purchaser and supplier have recorded invoices in different return periods.

Invoice value from Supplier and Purchaser differs by a minor value because both parties have different conventions of rounding off.

➩ The invoice value differs at supplier and purchaser’s end in case a CN/DN is issued and it fails to match in a recon row.

When invoice number and date do not match while only the invoice value matches between two parties.

➩  There are multiple invoices between a purchaser and supplier where every invoice is of same value at different dates and one of the parties has recorded invoices higher than the other. This happens in case of regular fixed supply business.