Professional Documents
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Administer Financial Accounts
Administer Financial Accounts
Administer Financial Accounts
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Occupational Standard: Accounting and Finance Level III
Unit Title Administer Financial Accounts
Unit Code LSA ACF3 04 1221
Unit Descriptor This unit describes the performance outcomes, skills and knowledge
required to correctly allocate payments, reconcile accounts and
maintains customer details.
Variable Range
Details on customer May include but not limited to :
accounts Company Number
credit limit
customer contact telephone numbers
customer delivery and postal addresses
customer file and identification number
customer name
facsimile numbers
electronic addresses
invoice and account number
outstanding amount details
part payment details
payment due
Payment due date.
Organisation May include but not limited to :
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guidelines and policy legislative requirements
memorandums
policy and procedures manuals
Workplace documents.
Documentationm
May include but not limited to :
account maintenance forms
aged debtors trial balance
audit trails
cash allocation and journal processing
credit or debit notes
customer account reconciliations
customer statements
dishonoured cheques
purchase orders
signed delivery dockets/notes
Billing adjustments May include but not limited to :
cancellation fees
claims
discounts
correction of Goods and Services Tax
full payment received
interest charges
outstanding amount
part payment received
refunds
reimbursement fees
sales tax
Account files may be: electronic
paper-based
Sources of customer government agencies
details may include: inter-organization departments
Accounting is a technical business function responsible for recording, reporting and analyzing
financial information. Small business owners use accounting to determine the profitability of their
company ’s operations. As small businesses continue to grow and expand, accounting
processes and procedures may be needed to maintain the company’s financial information.
Accounting processes and procedures are usually based on the basic accounting cycle. The
accounting process outlines how financial information flows through a company and which
individuals are responsible the information.
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Identify Transactions
Identifying transactions or other financial events is the beginning of the accounting cycle. Business
owners use written documents to track specific information relating to financial transactions. These
documents classify transactions and usually include specific information regarding economic events.
Business owners also use this information to have a historical record of business transactions. Once
each transaction is identified and classified, the information is recorded in the company ’s
general ledger.
Record Transactions
Recording transactions is the physical process of entering financial data into the company ’s
general ledger. Small businesses may use manual or automated accounting ledgers in their business
operations. Manual accounting requires business owners to maintain several paper ledgers for
recording financial transactions. Accounting software provides business owners with an electronic
process for recording transactions and maintaining financial information.
Recording transactions may require business owners to prepare journal entries based on financial
transaction documents.
The final output of the accounting cycle is the preparation of financial reports and statements. These
reports and statements provide business owners with information regarding the efficiency and
profitability of business operations. Business owners often use information to make decisions on
improving operational performance. Business owners can also use this information to secure external
financing for growing and expanding their company.
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Handling Procedures
Accounting procedures usually dictate which individuals are responsible for financial or
accounting information. Smaller or home-based businesses do not usually require these
procedures. Larger business organizations may employ several individuals to handle financial
information and move it through the accounting cycle. Handling procedures outline who is
responsible for gathering financial data and how the information will be entered into the general
ledger.
Reconciliation Procedures
Review Procedures
Review procedures are an important part of the accounting process. Business owners implement
these procedures to ensure financial information prepared by employees is correct. Larger
organizations with accounting departments commonly use a controller or accounting supervisor
to review an employee ’s work. This review process may discover errors and require
changes prior to releasing financial information to business owners.
A financial transaction control is a procedure that is intended to detect and/or prevent errors,
misappropriations, or policy non-compliance in a financial transaction process.
Control procedures help an organization achieve its mission and strategic objectivesby
ensuring resources are effectively collected and used, and accurately accountedfor.
A control procedure may be performed by either an individual or as part of anautomated
process within a financialsystem.
A control procedure is effective only if there is adequate separation of dutiesbetween
individuals performing the different control responsibilities in theprocess.
o For more information about separation of duties, refer to the “Understanding
Separation of DutiesGuide.”
An individual usually receives a formal delegation of authority to perform a transaction
process control procedure and, upon successful completion of the procedure, isexpected
to document his or heraccountability.
o This is usually done by indicating approval through a signature on a form or an
on-line approval captured in an automated financial system. For
moreinformationabout financial accountability, refer to the “Understanding
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FinancialAccountability Guide."
financial transaction processstages
A specific financial process may be composed of some or all of the following activities,
orstages:
Transaction
Description Examples
Process Stage
Entity set-up Setup of basic vendor, customer, or Customer, vendor, or employee account
review and employee information in a financial set-up, which includes account number
approval * system and verification (review) of assignment, contact, and other information.
the data’s accuracy.
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Balance analysis Review of ratios, trends, or year-to- Comparison of monthly expenditures with
year comparisons to identify prior years’ amounts; comparison of
potential errors. expenditures to budget.
Risk Examples
3. Unintentional asset Good sent to wrong place because of the input of an incorrect
misdirection error address; excess financial aid check sent to wrong address because of
incorrect student account data
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contractual, or terms of a contract
policy non-
compliance
The goal of a well-managed financial transaction process is to ensure that each completed
transaction complies with all of the following seven transaction control standards applicable to
the process:
Types of financialcontrols
To manage the risk of a financial transaction processing failure, manual and/or automated control
procedures are implemented at key stages of the process.
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2. Asset receipt verification Review and approval of a receivingreport
4. Data processing Automatic summarization and posting of invoice payment data tothe
general ledger
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Control procedure strength levels
The strength, or level of reliance, placed on a financial control procedure in managing risks
depends on three key factors:
Procedure Control
Typical Attributes
Strength
A well-managed organization deploys a mix of strong, moderate, and weak control procedures at
different stages of a financial process in the most cost effective way.
Strong controls, relied upon heavily to manage risks, tend to cost more tomaintain.
A strong control is typically implemented at the point or points in a financialprocess
where the maximum number of risks can be managed, which enables using weaker,
usually less costly controls, at other points in theprocess.Control procedures for the
same financial process may differ between departments in recognition of differing
operational needs, financial accountability structures, staff skills and experience levels, and
risk tolerances.
Follow this approach to assess the overall effectiveness of control procedures within a financial
process.
You may find the Financial Control Assessment useful in evaluating the overall adequacy of
control procedures in a specific financial process.
Each campus financial transaction, which includes purchases, payments, cash receipts, and
ledger adjustments, is expected to meet the following seven control standards:
The financial controls put into place at different stages of a financial transaction process are
expected, when considered together, to provide reasonable assurance that each transaction meets
the seven control standards. Each control may focus on verifying that one or more of the
transaction control standards is being met. Well-managed units effectively balance operational
efficiency with the strategic deployment of financial controls. Here are some examples of
commonly deployed controls at different stages of a financial process:
(For proper separation of duties purposes, the individual performing the control activity must be
someone other than the person performing the input or processing of the information.)
1. Entity set-up Review and approval of the key set- Review and approval of the address,
review and approval up information about the person or phone number, and taxpayer ID number
* entity receiving a payment or a bill for a vendor set up in the Financial
Information System (FIS).
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4. Asset receipt Confirmation of receipt of a Issuance of a receipt to a student making
verification payment, good, or service a payment, or the approval of a receiving
document in the Financial Information
System
Not all control stages are applicable to all campus business processes. In addition, divisions or
departments may differ in level of reliance placed on controls at different stages of the process
based on staffing levels and competencies, system controls, and/or operational considerations.
Despite these differences, controls must be deployed in a manner that ensures each financial
transaction complies with the seven transaction control standards.
The following table provides an example of how two different departments may implement
different procurement and payment process control strategies that both enable compliance with
the seven transaction control standards. You will notice that at many control stages,
eachdepartment places a different level of reliance on the related control procedures. But overall,
each strategy provides reasonable assurance of compliance with the seven transaction control
standards. The strategies assume that adequate separation of duties exists among the individuals
performing the control activities.
LO2: Reconcileaccounts
Reconciliation
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Definition:
Purpose:
The process of reconciliation ensures the accuracy and validity of financial information. Also, a
proper reconciliation process ensures that unauthorized changes have not occurred to
transactions during processing.
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unintentional, should be detected, with the appropriate central office or processing department.
investigated and resolved in a timely
fashion. Document a plan for the research and correction of errors or
discrepancies of each type of transaction or activity.
Communicate these processes and procedures with the
appropriate staff.
Documenting the process and completion: Be consistent with reconciliation processes. Changing the
reconciliation process often leads to undiscovered inaccuracies
Reconciliation processes are most effective and potential fraud.
when they are consistent and thorough.
Employees involved in the reconciliation Reconciliation should be documented clearly to verify that a
process should be knowledgeable and clear review has been done.
on their responsibilities and expectations.
The reconciliation process and procedures should be
It should be clear to an external reviewer documented clearly and communicated. Consider documenting:
when a reconciliation has been completed.
The steps in the process
Who performs each step
Expectations regarding timeliness
A mechanism for providing proof that all activity has been
reviewed and reconciled
A procedure for error correction.
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What is meant by reconciling an account?
Reconciling an account often means proving or documenting that an account balance is correct.
For example, we reconcile the balance in the general ledger account Cash in Checking to the
balance shown on the bank statement. The objective is to report the correct amount in the general
ledger account Cash in Checking. You will often need to adjust the general ledger
account balance for items appearing on the bank statement that were not entered in the general
ledger account.
I recall being asked to reconcile the general ledger account Freight Payable. What I needed to do
was provide documentation that the balance in Freight Payable was proper. I proceeded to look
at the shipments of recent sales and then determined how much we would be obligated to pay for
the freight on those sales. We then adjusted the balance inFreight Payable to my documented
amount. This reconciliation was done to have the correct account balance and to provide the
outside auditors with documentation which could easily be reviewed.
I also reconciled the balance in Utilities Payable by computing the daily cost of each utility that
the company used. The cost per day was then multiplied by the number of days since the last
meter reading date shown on the utility bills already entered in our accounting system. We then
adjusted the Utilities Payable account balance to be equal to the documented amount.
Budget Reconciliation
This information is intended to provide guidelines for a regular budget reconciliation process. Please
review all of the content provided in the sections below.
Definition: Budget reconciliation is the process of reviewing transactions and supporting documentation,
and resolving any discrepancies that are discovered.
Purpose: Regular reconciliation should be done in your department to provide reasonable assurance that
transactions are authorized, reasonable, allowable, and correct.
All colleges, schools, departments and units should perform regular budget reconciliation for all budget
types.
(Note: For the purposes of these guidelines, we will use “department” as the standard word for any
university organization, whether college, school, department, or unit)
Department staff knowledgeable of University and departmental policies, budget restrictions, and
reconciliation guidelines should be involved in regular reconciliation of department budgets. This often
includes department Administrators and Fiscal Specialists.
Ideally, the reconciliation process involves someone who did not initiate, record, or authorize the
transactions. Your department process should have separation of duties. This means that no one person
has sole control over the lifespan of a transaction.
A budget reviewer reviews budget activity for reasonableness and appropriateness. A reviewer is
someone:Accountable for thebudget
Conversant with all rules and regulations applicable to thebudget
Who does not pose any separation of dutiesconflicts
Special Notes on Sponsored Budgets: The Principal Investigator (PI) is responsible for their grant
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budgets, unless the PI has delegated authority to another person who has direct knowledge of the needs of
the project. See Reconciliation Best Practices for additional guidance.
When possible reconciliation should be completed monthly, within 45 days of month-end close, but no
less frequently than quarterly. For sponsored agreements a final reconciliation should be completed within
45 days of the budget end date. Keep in mind that special situations such as biennium close may take
longer to finish than “regular” months.
1) Review transactions
Validate that supporting documentation (electronic or paper), including source documents, matches
expense or revenue transactions on the official university record (e.g. MyFD Transaction Summary or
Reconciliation Report, Enterprise Data Warehouse (EDW) Reports, BAR).
The person accountable for the budget has knowledge of the nature of the transaction, is able to
explain what it is for, and the transaction originated from a UW source. The source document
needs to be reproducible and available according to the record retention schedule. Examplesmay
include: regular salary charges originating in UW payroll system, and internal recharges (e.g
ISDs,CTIs).
It is less than $75 and your department has other compensating controls in placeregarding
expenditures. The strength of your department’s documented internal controls over purchasing
and receiving may affect the depth of your reconciling activity, and departments may choose
to be more restrictive with their threshold of review.
Special Note on Federally-Sponsored Budgets: Federal auditors may ask you to provide supporting
documentation for these transactions. If sufficient documentation is not available, your department may
be responsible for reimbursing for these charges.
Your departmental reconciliation procedures should document who is responsible for investigating and
resolving discrepancies, taking into account appropriate separation of duties.
For errors involving transactions of $10 or less, see guidance provided in GIM 15 Attachment B:
CostTransfer Minimum Thresholds (applies to all budget types).
4) High level review and analysis of budget activity by someone accountable for thebudget
Remember that department records should provide evidence that the budget reconciliation has been
completed and reviewed.
We recommend that departments document their reconciliation policies and procedures, addressing any
areas that are not in accordance with the reconciliation guidelines provided here. Documented
departmental reconciliation policies and procedures should be kept current.
If your department does not maintain its own budget reconciliation policy, auditors may use these
Reconciliation Guidelines and/or department internal controls to assess your reconciliation practices as
part of an audit.
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LO3: Maintain customerdetails
Maintaining Customer Accounts
Financial Background
A client's financial situation may change, so it is important for representatives to verify
periodically that the customer's information is still accurate. Clients may not be
forthcoming with such changes, but clues such as changes in purchases and sales may
indicate otherwise.
Objectives
As an investor ages, his or her risk tolerance, investment time horizon and goals change.
All clients will modify their investment objectives to match changes during their lifetime.
Address Changes
A change in address may affect the ability of a registered rep or broker-dealer firm to
serve a client. If a broker-dealer or rep is not registered in the state in which a client now
lives, no business may be transacted until the registration is updated.
Transferring Accounts
When a customer wishes to transfer an account from one broker-dealer to another, the
customer must sign a transfer request with the new member firm, which is mailed to the
carrying firm.
Both member firms must coordinate their activities to expedite the transfer:
theclient'snewfirmmustimmediatelysubmitthetransferrequesttothecarrying
firm,and
thecarryingfirmmusteithervalidatetheinstructionsortakeexceptionwithin three
(3) businessdays.
Any exceptions must be resolved in an expeditious manner by the twofirms.Causes for
exceptions to the transfer include incomplete or improperly signed transfer instructions or
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having no record of the account. Otherwise, thecarrying firm is obligated to make the transfer
as quickly aspossible.
Account Statements
Broker-dealers are required to provide customers with a statement at least quarterly,
although if any activity has occurred in the account, the usual practice is to provide a
statement for the month in which the activity has occurred. The account statement
contains the following information:
Cashbalances
All securitypositions
Activity in the account since the laststatement
You will often need to explain to your clients when and why they will receive statements.
Some clients dislike receiving statements on a monthly basis because they don't like the
extra paper, so you must explain to them why your firm is obligated to send a statement
when there is activity in the account.
Customer accounts
Customer accounts store password-protected information about a customer's identity, order
history, and current order status. This information is saved between visits, and retrieved when the
customer next logs in. Some details are used to pre-fill address information during checkout.
If your customer accounts are set to optional or required in your Checkout settings, you can send
customers direct invitations to encourage them to activate an account. They'll receive an email
prompting them to create their own password.
There are two ways to generate customer account activation emails:
Individually
Inbulk
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Managing Customer Accounts
Managing your store's customers is a vital part of your business, and Volusion makes managing
customer information easy.
Customers registered with your store have their information stored within the Customers table.
From this central point, you can manage customer information, see an overview of customers,
grant affiliate or administrator status, and more.
Creating a Customer Account
Customer accounts can be created in a couple of different ways - from your storefront by visitors
or from the Admin Area by an administrator.
Note that any customer type, whether a customer, affiliate, or administrator, must have a
customer account. The only exception is if you've configured your store to allow anonymous
checkouts. In this case, customers are not required to register for an account before completing a
purchase.
Note that only standard customer accounts can be created from your storefront. Once customer
accounts are created, customers can apply to become affiliates, but the affiliate status of an
account must be approved by a store administrator.
Payment Settings
The Payment Settings section lets customers edit their credit or debit card information, view gift
certificate balances, or apply gift certificates to their account by entering a 13 digit certificate
code.
Customers can also view their order status and obtain special order information such as
downloadable products and product keys.
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5 Ways to Maintain Clean and Accurate Customer Information
Has it ever happened that you make a follow-up call, only to find out that another member of
your team had already contacted the customer? That would be a little embarrassing but where
was the confusion? After cross-checking you clearly noticed that there was no record of a call
being made to the contact, but there sure was a duplicate contact, assigned to another sales rep!
Inaccurate or incomplete CRM data often hamper sales and marketing performance. Many of
your contacts would have changed their phone number, email address or even their company,
leading to an accumulation of redundant and incomplete data in your CRM. So how are you
going to maintain clean CRM data? Help yourself with these 5 tips to not only get your CRM
system under control but also to save time and headache down the road.
We all realize how important it is to add clean data in the CRM system… and not just that, to
avidly maintain it too! Maintaining data quality is not a one-time event. If not taken carefrom
the beginning, you may end up having a tedious taskahead.
It's just good business to offer your customers options for making payments. These options can
include payment plans, using credit or debit card, online payments, checks, cash, moneyorders,
cashier’s checks, automatic withdrawals or western.
"People tend to resist that which is forced upon them. People tend to support that which they
help to create," says author Vince Pfaff. I am sure you can relate to this quote and so can your
customers. When you call a past due customer and demand payment in full you won't get as farif
you called and offered a couple of different options for paymentplans.
If you have never set up payment plans before I have some suggestions for setting up realistic
payment plans for your customers. One thing you must do is to make sure your customer knows
you understand that every situation is different, and that you will take into consideration their
ability to pay, the amount unpaid, their payment history, length of time they have been a
customer, and specific reasons why the account is past due in working out a payment solution
with them.Make sure your customers know setting up these payment agreements is not
something that can be done all the time; you're doing it now because there is a problem and you
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want to resolve that problem. Often, customers get very comfortable charging more products or
services and just making the monthly payment plan payment. You can avoid this by putting
every agreement in writing with a start date and an end date.
Some companies have rules about payment plans. This could include not entering payment plans
by one customer more than once per year or requiring a 15 percent deposit for all new payment
plans.
With the economy a mess and more consumers unable to pay their bills, the objective of setting
up payment arrangements is to at least get paid something rather than nothing. Most customers
will look at all their bills and then make a decision on which ones will get paid that month based
on what is most important to them. It is your job to make your invoice important to them and
offer them realistic options so they will pay it each month. You want to effectively outline
policies and procedures that will help provide your customers with options when they cannot pay
in full. Something to remember if you don't like the idea of offering payment plans. If someone
owes you money, they probably owe others money and who ever takes action first or offers a
solution, will get paid first.
2. Have two or more options for payment arrangements in mind before thecall
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