Blue Link Solutions System Integrity Checks / Monthly Procedures
Prepared by: Blue Link Consulting Group 2003 年 6 月 6 日 星期五
Table of Contents
Introduction...... 1 New Implementation Procedures...... 1 Monthly Procedures...... 2 Year End Procedures...... 2 Tools at your disposal...... 3 Re-Calculate AR or AP Summaries...... 3 Create / Verify Inventory Locations...... 3 Re-Calculate General Ledger Summaries...... 4 Check Control Account Balances Tool...... 5 How to Investigate AR or AP Control Account Out of Balance with GL...... 5 How to Investigate Inventory Control Account Out of Balance with GL...... 6 Bank Accounts Sub-Ledger...... 6 Understanding Exchange Difference...... 7 Realizing a Foreign Exchange Gain/Loss...... 7 Example...... 8 Landed Cost Accruals...... 9 Multiple LCT Control Accounts...... 9 Procedure for reconciling LCT Accruals...... 12
Introduction The purpose of this document is to outline monthly procedures that all organizations running Blue Link Solutions should be performing to ensure the integrity of the data in their system.
Customers who have customized applications may want to repeat many of these procedures on a daily or weekly basis. This is especially important after the delivery of a new application as following these procedures will make it easier to identify any possible integrity issues with the application. In addition, following these procedures on a regular basis will help you identify any possible problems with the way your staff are using the application.
New Implementation Procedures The following procedures should be followed on a daily basis after the delivery of a new application: Check Control Account Balances: o Variance should be zero for all items listed. Check GL Trial Balance: o Double-check that Debits = Credits Check balance of GL clearing account:
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o A balance in this account may indicate that a GL Account specified no longer exists, or that you have changed the way you use the application and should now create a specific account where you had previously specified the clearing account (i.e. you didn’t charge interest before, but do now). Check value of FX Variance account: o Look for any large value transactions – legitimate transactions to this account should have very small amounts (i.e. due to rounding) or at least be in line with transactions that resulted in the variance. If a particular module was customized, inspect the GL postings for transactions posted via the customized module. Make sure the GL Accounts and values posted are what you expect. Verify that backup procedures are still working for the new app or data: o SQL – Make sure DB name didn’t change, or if it did, update maintenance routine scripts. o Make sure the SQL Server agent (the process that runs the backups) is still running . Easiest way to do this is to make sure that there are .bak files for all dates that should have been backed up. o In General – Make sure backup to tape is working. And test at least one restore to make sure the restore process works, that tapes are not corrupt, etc.
Monthly Procedures On a monthly basis the following steps should be performed: Bank Reconciliation Reset MTD figures by running the month-end routine Check Control Account Balances for all control accounts. Optionally realize exchange difference. Print Aging Report(s) Inspect GL Trial Balance Disaster Recovery: o Verify that tape backups have been running, perform a test restore. o Make sure person responsible for taking tapes off-site has been doing this. Make sure that as of this moment there is at least one tape located off-site. Delete abandoned transactions: o Look for open, unposted: . GL Journal Entries . AP Vouchers . AR Vouchers . Sales Orders . Purchase Orders . RMAs . Accruals that have not been applied, or that have small balances. Update “post from” date in system master to prevent users from posting transactions prior to this date. Optional: Inventory Cycle Counts Reconcile “PO Not Invoiced” GL Account – LCT Accruals report should tie to the GL Accrual accounts. Inventory Valuation by inventory class should tie to inventory GL accounts for that class. o Do this by running a valuation report, then: . If any inventory classes share the same asset account, sum the inventory valuation report sub- totals for those classes to arrive at the total to compare to the GL. Get the GL figures by running a trial balance report. . Example: If inventory valuation report sub-totals by class show: Inventory Class Balance GL Asset Account tied to that class (from System Master Screen – Inventory Tab) A $10 15000 B $10 15010 C $10 15000
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Total for GL Account 15000 = $20 – Compare to trial balance for 15000 Total for GL Account 15010 = $10 – Compare to trial balance for 15010 Generate recurring: o General Journal Entries o Accounts Payable Vouchers o Sales Orders If taxes are remitted monthly, prepare tax remittance (in Version 9.5 or later, use the new tax remittance screen to generate the AP vouchers and mark the items as paid).
Year End Procedures
Inventory Valuation / Count Because the inventory value is always changing it is important to decide what your strategy will be for processing inventory counts.
To decide what procedure to follow, answer the following questions: 1. Do the values used for the inventory count variances have to be based on the values at year end (i.e. either FIFO or Average)? If yes, then you must process the inventory count BEFORE allowing any users to process any other inventory-related transactions in the new fiscal year. If no, then you may allow users to process other inventory-related transactions, but be aware that the cost adjustments will be based on the cost of inventory AT THE TIME you click the process button on the count screen. 2. Do you need to be able to run a system-produced inventory valuation report where the total of the report matches the value of the inventory on the GL? (i.e. For audit purposes?). If yes, then you must: o Process the inventory count BEFORE allowing any users to process any other inventory- related transactions in the new fiscal year. o Make sure the count date is set to the last day of the fiscal year. o Print the inventory valuation report. o Print the trial balance report as of the last day of the fiscal year. o Make sure the balances match. o Warning: There is no retro-active inventory valuation report. This is your last opportunity to adjust the value of inventory. You cannot run the inventory valuation report “as of” the last day of the fiscal year, you can only view the “current” value. If users post transactions after the count, you have lost the opportunity to run the report. If no, then evaluate your answer from #1 above.
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Tools at your disposal
Re-Calculate AR or AP Summaries (Utilities Menu) When you would use this tool: o You notice that the total invoices outstanding or total credits figure shown on the customer screen does not match the detail records for these items. What the tool does: o Re-Calculates the total invoices outstanding figure from the detail in the Accounts Receivable Transaction File table. o Re-Calculates the total credits outstanding figure from the detail in the Accounts Receivable Transaction File table. Note: If you find yourself running this tool on a frequent basis there is something wrong with your customized application. Please contact Blue Link.
Create / Verify Inventory Locations (Utilities Menu)
When you would use this tool: o You’ve created a new warehouse and need to have location records created. . For example: Data Migration: After importing inventory figures run this tool to create location records in the [Inventory Location Information] table. o You’ve noticed that one or more of the following numbers in the inventory record, don’t match the details for that record. (For example, inventory screen shows 5 UBO but when you inspect all open sales orders you only find 1 UBO). . UBO . UOO . UOSO . UOH What the tool does changes based on the options selected. Below are the options: o Create Inventory Locations:
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. It is necessary to run this routine when you have created a new warehouse location. It creates a location record for that warehouse for each inventory item. . Creates a corresponding record in [Inventory Location Information] table for each record in [Inventory Master Locations] . The following are designed to fix data where there is a discrepancy between 2 sets of information (for example detailed records do not correspond with summary records etc.) o Recalculate units on sales order / on hand: . This will recalculate the detailed tables of on hand items and sales orders . UOSO = Quantities allocated on Invoice Footer + quantity on Production Lots with type “F” . Used to bring [Invoice Footer], [Production Control Kit], [Inventory] and [Inventory Location Information] tables into sync with each other . Updates [Inventory] and [Inventory Location Information]![UOSO] with calculated UOSO value . Updates [Inventory]![UOH] with ([Inventory Location Information]![UOH]+ [Inventory Location Information]![UOSO]-calculated UOSO) . If the New [Inventory]!UOH value < 0 then set to 0 o Recalculate units on back order from sales orders: . This ensures that the summary number of items on backorder correspond with the detailed records . Used to bring [Invoice Footer], [Inventory] and [Inventory Location Information] tables into sync with each other . Updates [Inventory] and [Inventory Location Information]![UBO] with calculated values from [Invoice Footer] o Recalculate units on purchase order from purchase orders: . This will recalculate the detailed Purchase Order tables to give you a summary number . Used to bring [Purchase Order Footer], [Inventory] and [Inventory Location Information] tables into sync with each other . Updates [Inventory] and [Inventory Location Information]![UOO] with calculated values from [Purchase Order Footer] o Synchronize inventory movement file: . This will take into consideration items on hand and adjust the movement log if necessary . Used to bring [Inventory Movement] into sync with [Inventory Location Information] table . Appends record with net change amount to [Inventory Movement] to make the BalanceAfter equal [Inventory Location Information]![UOH]+[UOSO] o Synchronize FIFO layers with inventory totals: . This will look at the detailed records of items on hand and synchronize the FIFO layers table to correspond. . Used to bring [Inventory Manufacturer Information] into sync with [Inventory] . Records appended or layers exhausted in [Inventory Manufacturer Information] to equal [Inventory]![UOH]+[UOSO] Note: If you find yourself running this tool on a frequent basis there may be an issue with your application. Please contact Blue Link to initiate more detailed troubleshooting procedures.
Re-Calculate General Ledger Summaries When you would use this tool: o You notice that the balance on the Trial Balance report with detail doesn’t match the balance on the Trial Balance report in summary. o If when running the detailed trial balance, the total does not match the sum of the detail. o If running Financial Reports, the balances shown differ from the trial balance for the same time period and you have very carefully reviewed the report and column definitions for the time frame in question. What the tool does: o Re-calculates the “summary” figures stored in the General Ledger Chart of Accounts table with actual values from the General Ledger Transaction table.
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Note: If you find yourself running this tool on a frequent basis there may be an issue with your application. Please contact Blue Link to initiate more detailed troubleshooting procedures.
Check Control Account Balances Tool (Utilities Menu)
The check control accounts balances screen is a quick method of comparing the value of your sub-ledgers to the control accounts on the GL. The variance column on this screen should always be blank or show 0.00. o In the example shown above, the Inventory Control account shows a variance, indicating that the value of the inventory sub-ledger does not match the value of the control accounts. o Such a variance should be investigated immediately.
How to Investigate AR or AP Control Account Out of Balance with GL AR or AP out of balance condition could occur if: o User manually posts a GL entry to the AR control account. o User manually edits values in the [Accounts Receivable Transaction File] (for AR), [Accounts Payable Transaction File] (for AP): . If user in back-end database changes the value of [Inv_Remaining] or the value of [CurrencyAmount] this will change the value of the sub-ledger. o There may be an issue in your customized application that has resulted in a different value being posted to the AR control account vs. the AR sub-ledger. . If you suspect an issue with the software, please do the following:
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Record the variance before. Process a transaction you suspect is causing the problem. Record the variance after. If variance has changed, report the issue to Blue Link.
How to Investigate Inventory Control Account Out of Balance with GL Inventory out of balance condition could occur if: o User manually posts a GL entry to any of the inventory GL accounts. o User manually changes the value of inventory in the inventory tables. Examples of changes that would affect inventory value: . User changes GL Control account or department associated with the ASSET inventory class in the [Inventory Classes] table. (System Master screen, Inventory tab) . User changes one or more of the following in the Inventory table: [UOH] [UOSO] [AVGC] – if using average costing . If using FIFO costing; if a user manually changes the value of the [FIFO] field one or more of the following in the [Inventory Manufacturer Information] table (the FIFO table): [FIFO] – Stores the cost of each item in this FIFO layer. [QTYIn] – Stores the QTY in when the layer was created. [QTYOut] – Stores the QTY relieved since the layer was created. Value of the layer = (QTYIn - QTYOut)* FIFO. o A program issue may have resulted in a different value being updated in the inventory sub-ledger vs. the GL Control account. . You may be able to identify the type of transaction that causes the inventory issue by following these steps: Check the control account balances prior to posting a transaction and make note of the variance. Post the transaction (i.e. post the purchase order, or the sales order) Check the control account balance after posting the transaction and make note of the variance. If the variance has changed, and you are the only person posting transactions, then it is likely that a program bug is the source of the problem. o If you find an issue such as these, please attempt to duplicate it a second time then if you can duplicate it, please report it immediately to Blue Link along with a detailed example of the transaction that caused the problem.
Bank Accounts Sub-Ledger Each bank account has a sub-ledger. o The bank accounts setup screen (under Modules -> Bank Management) includes a field: [Balance]. The balance field (also stored in table: [Check Register Setup]) should tie to the current balance on the GL (i.e. Trial balance run as of the last day of fiscal year will show the current balance in that account including any post-dated transactions). If not, then this bank account “sub-ledger” is out of balance with the GL. . An out of balance issue here will mean that you cannot reconcile the bank account to the GL – the reconciliation report will always report a variance. . Such an out of balance issue should be reported to your dealer or to Blue Link. To fix this, an analysis will be performed to inspect values in the [Check Register Setup] versus those in the GL.
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The summary figures for “Deposits” and “Cheques Written” should match the sum of un-cleared items in the [Check Register Items] table. o Specifically: . The sum of [Check Register Items].[Deposit] for a particular bank account should = the [Check Register Setup].[Debit] field for the same bank account. . The sum of [Check Register Items].[Cheque] for a particular bank account should = the [Check Register Setup].[Credit] field for the same bank account.
Understanding Exchange Difference Blue Link Solutions stores the values of all general ledger balances in the home currency of the registered company with exception to the bank accounts. The balance for all bank accounts is stored in the native currency of that bank account in the GL. Periodically, exchange rates should be updated and the exchange difference account should be “re-valued” using the new rates (a report is available from the bank management menu to assist in this process). The difference between the current balance of the account and the “re-valued” balance is then expensed to a gain or loss on exchange expense account.
If you operate a Canadian company and have a US currency bank account , the value in the exchange difference account will add to the value of the US bank account. For example, if there is a value of $10,000US the exchange difference account will have a debit balance of approximately $4,000-$5,000 (base on an exchange rate of between 1.4 and 1.5). Since the value of the US currency is greater than the Canadian currency (currently at the time this document is written) there is a positive correlation meaning that as the US bank account increases so will exchange difference account.
If you operate a UK company and have a US currency bank account the value in the exchange difference account add the credit (i.e. adding a negative has the effect of subtracting that value) from the value of the US bank account. For
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example, if there is a value of $5,000US the exchange difference account will have a credit balance of approximately $2,000 (base on an exchange rate of .62). Since the value of the US currency is less than the British Pound (currently at the time this document is written) there is a negative correlation meaning that as the US bank account increases the exchange difference account will be credited.
Realizing a Foreign Exchange Gain/Loss As indicated above the exchange difference account is used to balance the trial balance and revalue the foreign exchange bank accounts. Realizing a Gain/Loss due to foreign exchange is relatively straight forward. When you are ready to realize your gain/loss follow the following steps: 1. Change your exchange rate to the current rate You can change your exchange rate in System Maintenance | System Master Lists | Currencies /Departments / Payment Methods
2. Print the Unrealized Exchange Difference report found under Bank Management (in previous versions you would find this under the Cheque Register menu). You will find a value for the Unrealized Exchange Difference This amount is what your exchange difference account should be (based on the current exchange rate entered in Step 1). Therefore the journal entry is to make this balance. The offsetting account is the gain/loss account. 3. Enter a journal entry that would realize the gain or loss.
Example Assume: Canadian company US bank account beginning balance is $10,000 (Debit) Exchange difference account is $5,000 (Debit)
Transaction An AP Invoice is entered for $1,000 US
Debit Credit AP 1,500 Expense 1,500
The AP Invoice is paid
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Debit Credit AP 1,500 US Bank 1,000 Exchange Difference 500
There is a transfer of funds from the CA$ account to the US$ account at a rate of 1.45
Debit Credit CA$ Bank 1,450 US Bank 1,000 Exchange Difference 450
The ending exchange rate is 1.45, the balances in these respective accounts are: Balances Debit Credit US Bank 10,000 Exchange Difference 4,950
The unrealized gain/loss report shows Native Exchange Local Unrealized Currency Rate Balance Exchange US Bank 10,000 1.45 14,500.00 4,500.00
There is a difference of $450. Therefore the GL entry is:
Debit Credit Gain/Loss 450 Exchange Difference 450
The logic behind this loss is that the loss was created from the decline in the exchange rate and it devalued the currency on hand. The lesson is that you don’t have to worry about each individual transaction for foreign currency. The system takes care of this and all you have to do is record the gain or loss at the appropriate time.
Note: Blue Link Solutions uses a single exchange difference GL account to track the differences for all bank accounts; all currencies. So it is important to revalue all bank accounts at the same time when preparing this transaction.
Landed Cost Accruals The purpose of this section of the document is to explain how the landed cost accrual transactions work, where data is stored, and how you can audit this account on a regular basis.
Multiple LCT Control Accounts There are multiple control accounts for accruals: PO Received, No Invoice: o This account stores the value of all purchase orders that were received with the “invoice receipt” checkbox turned off.
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o The user specifies this account here:
Landed Cost Factors:
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o Each landed cost factor can have a different control GL Account associated with it. These accounts are defined on this screen:
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The sum of the values of all these GL Accounts added together is what makes up the GL Account figure on the check balances screen:
The value of the sub-ledger on this screen comes from LCT Accruals table, which can be viewed through the system by running the Modules Elite Items LCT Accruals report.
Procedure for reconciling LCT Accruals Run the LCT Accruals Report Verify that the items that appear on this report really should be outstanding: o You haven’t yet received the invoice for the item from the vendor. o Small balances really are outstanding. If you find items that appear on the report, but should not be on the report any longer because a user has already received the invoice for the item, then: o Inspect the transaction for the invoiced items: . Where did the user put the Debit side of the transaction? If the user posted the Debit to one of the control accounts, then the solution will be to remove the item from the accruals table. If the user posted the Debit to an account other than the control account (such as to COGS), then an adjusting GL entry will have to be made for the transaction to move the item to the accrual account. o Alternatively, a credit AP voucher could be posted to “undo” this transaction, then a second, AP voucher could be entered and the accrual off-set using the regular accrual off-set procedure. o If the item has to be removed from the LCT Accruals report:
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. Contact your dealer or Blue Link. To remove the transaction from the sub-ledger, the dealer will mark the item as “Applied” and will enter a date applied in the [LCT Accruals] table. Once the LCT Accruals report is accurate: o Run the LCT Accruals report and extract the sub-totals for each factor. o Take the sum of factors that use the same GL account. o Compare the sub-ledger totals to the GL control accounts, and prepare a GL entry to adjust the value of each control account. o Once the voucher has been posted, the control account will be back in balance with the GL. o Monitor these accounts very closely to make sure all users are offsetting accrued transactions properly on a go-forward basis (we recommend changing the password for posting to control accounts).
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