Dorabjee's identified that there was a problem in their bank reconciliation and invited TopSource Worldwide in May 2012 to review their Bank reconciliation process and controls and provide recommendations to address this problem.
Bank reconciliation at Dorabjee's was reconciled till March 2011 with unreconciled transactions from 2006. Bank reconciliation was also completed episodically. There was no specific process or controls in bank reconciliation process.
Bank reconciliation process
TopSource Worldwide took a number of steps to arrive at an effective solution:
- Dorabjee's internal accounts team completed the bank reconciliation as on 31/3/12.
- Dorabjee's internal accounts team cleared historic unreconciled transactions from 2006.
- Dorabjee's internal accounts team recorded payment transactions which were not posted for the period - April'12 till July'12.
- TopSource Worldwide completed reconciliation from April'12 till July'12 as a 1st step.
- In reconciliation completed as on July'12 TopSource Worldwide identified all open items > 30 days and resolved them with the help of Dorabjee's internal accounts team.
- TopSource Worldwide then completed reconciliation from Aug'12 till Sep'12.
- TopSource Worldwide prepared a delivery schedule for receiving inputs, delivery of reconciliation and completed reconciliation from October'12 on a monthly basis.
Cash flow monitoring
Bank reconciliation is up to date and completed on monthly basis. All open issues are reported to Dorabjee's and resolved. Dorabjee's can rely on and use the bank reconciliation as a tool to identify any errors in the accounting records of the company or bank.
It provides an added comfort to Dorabjee's that the bank transactions have been recorded correctly in the company records. Monthly preparation of bank reconciliation assists Dorabjee's in the regular monitoring of cash flow of a business.
