Introduction to Reconciliation
There are two main Reconciliation views (Daily View & Periods View) that we will break down in this guide.
Reconciliation was designed to provide users with a way to ensure all of their daily balance and transaction data is feeding into Trovata. The completeness of this data is automatically checked by comparing the change in balance (Opening Balance - Closing Balance) to the net transaction activity (Credits + Debits). An account will pass the reconciliation check if the total change in balance equals the total net transaction activity on a daily, weekly, monthly, or quarterly basis.
Our goal is to replace the many hours spent downloading transaction statements and recording balance activity in an excel spreadsheet to ensure the completeness of daily cash activity. To provide an extra layer of detail in your reporting, transaction activity can be grouped by Tags (i.e. configurable cash flow categories) which can be included in your reconciliation report to further automate a daily cash flow report.
The module allows for a clear calculation of the difference between the opening ledger balance and the closing ledger balance (or the last balance received for the day). Alongside the change in balance, there is a summary of the day's transaction activity which will sum all of the debits and credits, count the total number of transactions, and calculate the total activity.
You will also notice a green ✓ mark or a red X which flags if the account reconciles or does not reconcile, respectively. Users are able to set acceptable thresholds for each account to ensure that if the amount difference is within that specific range, the reconciliation line will display a green ✓ vs. showing as unreconciled with a red X. If the account doesn't reconcile, the user should confirm that the relevant institution is sending data for that day. If not, Trovata will perform a data backfill to ensure that all balance and transaction activity is flowing into the system as expected.
Daily View Video
Reconciliation provides a dynamic experience for users where they can see the day’s activity on a single page in the reported currency at the Account, Entity, Region, Division, or Bank breakdown. Users may click to see the underlying account and transaction details, which will open a pop-up window that displays the information requested. Once configured, the reconciliation report can be saved for future use. The module also displays a period view of the configured activity in a selected currency which replaces a rolling daily cash flow report.
Best Practices/Recommendations for the Periods View
You may create as many Reconciliation reports as needed to fulfill global reporting.
1). Identify an Account, Entity, Region, or Division whose activity you wish to review
2). Change the Items Reconciled option to one of the 4 groups mentioned above
3). Using the Tag Breakdown, include your primary tags that reflect the broad buckets of your cash flow activity, such as:
Capital Markets Activity
4). Review the total breakdowns for each cash flow bucket
5). Compare your Trovata screen to a historical Daily Cash Report for accuracy
Periods View Video
Summary of Reconciliation
In essence, the Reconciliation module provides you with an efficient way to review and validate that your daily bank data, including your balances & transactions, tie out at an account level. Simply put, in the Daily View, users can check to see if the daily change in balances is equal to the daily net change in transaction activity. The Periods View allows users to check for the same outcome, and also includes a tag breakdown to track transaction activity cash flows over the specified time frame (daily, weekly, monthly, quarterly).