Account Reconciliation

Account Reconciliation is the process of comparing two records to identify any differences, ensuring that account balances are correct at the end of a particular accounting period. This process validates internal accounts to confirm that all accounts have been accurately recorded in the financial statements. It is a crucial internal control in the financial reporting process.

Reconciliation Process

• Monthly Comparison: The General Ledger, DDA, and Trust House accounts are compared to supporting documentation monthly. Any differences identified are resolved and recorded promptly to bring the records into agreement.
• System of Record: The processing platform is responsible for providing the Bank with the required files/data for automated daily reconciliation.
• Timing: Reconciliation of funds by the Bank is not real-time; it occurs at least one day post-activity.
• Data Delivery: Reconciliation files or data files must be delivered to Fifth Third Bank (FITB) via sFTP. No manual pulls from processing partners’ systems or emailed files are allowed.
• File Specifications: Reconciliation files must be provided to the bank within the specified format.

Initial Reconciliation Setup Steps

• Engagement and Overview: Once a mandate is received from a Program Manager (PM), the Line of Business (LOB) engages with the Accounting Reconciliation team to review the program and draft the funds flow design.
• Identify Flow of Funds and Account Structure: Determine the flow of funds and account structure, which may require opening multiple accounts.
• Next Steps: Schedule a call with the client to discuss how the data is designed within the processing platform, including transaction codes, unique IDs, etc.

Path to Production

• Complete Sign-Off: Obtain complete sign-off and documentation of the reconciliation requirements from the client.
• Implementation and Testing: The identified party will fully implement all agreed-upon reconciliation files with end-to-end testing in UAT and Production.
  • Test files are provided for review and sign-off before pushed into reconciliation system.
  • Production Testing involves minimal activity conducted in production by the program manager and agreed upon by Recon team.
    • (small $ transactions) to confirm correct money movement.

Post Reconciliation in Production

• Issue Resolution: If there is an issue with the files, the Accounting Recon team escalates to our client success team, which will then work with the client for resolution.
• Exception Handling: If an exception item is identified (e.g., unmatched for reconciliation or an account is out of balance), it will be escalated to our client success team, which will then work with the client for resolution.
• New Features: If the program has a new feature requiring additional/new reconciliation, it will be fully implemented and signed off before the feature is placed into production.