Reconciling Finance reserve

Why reconcile finance reserves?

Regardless of how the finance department is paid, they need to know what is happening.

A monthly report to identify possible errors, educate the finance department, finance set-up errors in the DMS system.

Reconciliation tool to double check what was set-up on the books versus what was paid.

FINANCE RESERVE RECONCILATION

Supplies list

  1. Finance reserve statements
  2. Depending on the DMS system, detail of finance reserve accounts or assigned finance reserve schedules.
  3. Finance reserve template.
  4. Paper, pen or pencil, highlighter

Time to get started?

Begin by making copies of all documents in your possession, place the originals in a safe place for future use.  Next, highlight all matching deposits or credits from the bank to books, then highlight all matching checks or debits from the bank to books (if any). There should be an additional list of debits (dealer chargebacks, see glossary) at times the bank will charge the dealer for a note paid off or repossessed in error.  Consider, before proceeding on chargebacks get the original sale document from the DMS system, record the original sale date, original lender and the finance person assigned to the original sales transaction.   Next, highlight all matching other transactions from bank to books.  Once comfortable that everything that matches is highlighted, time to update the attached worksheet in the highlighted area only.  It’s important not to alter or change the output template.  Once transactions are recorded on your excel worksheet time to check double check those transactions against the bank statement.

Once the preparer is comfortable, all outstanding transactions are complete time to review the data and make posting corrections if necessary. Once the worksheet states a zero variance and the data is correct, this reconciliation is complete.  Further audio discussion’s attached.

 

“They call it coaching but it is teaching. You do not just tell them…you show them the reasons.”

-Vince Lombardi-