1. Ensure that all Inventory, WIP and Pending activity for the current date has been processed and that no other transactions affecting these subledgers will be processed until after the reconciliation procedure has been completed and/or the date has been changed.
2. Record the last inventory transaction number used in the Inventory Activity File (file 91). This number can be used to verify the validity of the cuttoff on the Pending report which is used to reconcile the days activity. Note: The current version of the Inventory, WIP, and Pending subledger reports automatically record the last transaction number used when the reports are run and print an error message if the number changes during processing.
3. Produce a valid ending Pending subledger report. This can be accomplished by running the Pending File Report (FV161R01). The Pending File Report will list the extended value of all open (uncleared) Pending records when it is run with the default selections. The report uses the quantities (original and cleared) and the costs which are stored in each Pending record to determine the Pending subledger total. The value of any Non Stock items will not be included in the report total (these items are not included in the Inventory, WIP or Pending subledger totals). Note: The ending Pending subledger report is a point in time report (a “snapshot” of the open Pending quantities and costs at a particular point in time). The ending subledger report must include all activity through the end of the day being balanced and no activity after that date. A valid report can only be produced if it is run at the proper time. This is normally accomplished by running the report after hours or as part of the nightime process. The report can be processed automatically by the system at night and the system date can be changed immediately before or after running the report to ensure that the next days transactions will be posted using the proper date. This produces a report with a valid cutoff.
4. Verify that the subledger was in balance at the end of the prior day. The only way to prove that the beginning balance being used during this procedure is valid is to have already balanced the subledger for the prior days activity. This proves that the subledger beginning balance has a valid cutoff (that it includes all activity thru the end of the prior days processing and no activity from the current days processing). If the prior days activity is not in balance, then you must either balance it first (discover and resolve the cause), or balance the activity for the entire period since the last time that the subledger was proven to be in balance.
5. Run the Pending Activity by Transaction Type report (FV091R06) for the day being reconciled. This report will total the pending transactions for the selected date range by source and it will provide you with the numbers you will need in order to prove the activity in the subledger. The report automatically includes all transactions that affect the Pending sub-ledger and that should be included when proving the activity in the sub-ledger.
6. Prepare a reconciliation worksheet using the information listed on the above reports.
Pending Subledger - Daily Reconciliation Worksheet
Pending Sub-ledger Balance - beginning (1) 75000.00
Pending Activity by Transaction Type (2) 10000.00
Calculated Subledger Balance (3) 85000.00
Pending Subledger Balance – ending (4) 85000.00
(1) This should be a verified beginning balance and should be printed in detail and preferably to file so that the file can be searched if any problems are discovered during the balancing procedure.
(3) Add the total from the Pending Activity by Transaction Type report to the beginning sub-ledger balance and compare the calculated total to the ending sub-ledger report. The two numbers should match. If the totals are in agreement, file the reports (or archive the files and store the daily reconciliation worksheet for future use). If the totals do not match, the cause of the variance should be resolved.
If the subledger cannot be reconciled, the reasons for the variance may include the following.
• Items have been changed from Stocking to Non stocking during the period (ie Trk flag in file 70 is changed from Y to N) or vice versa. The value of Non stock items are not included in the total of the Pending valuation report, and changing the value in the STK field in the Inventory Master file can cause undocumented (unrecorded) changes to the value of the Pending subledger. To confirm that this value has been changed you may compare the beginning and ending reports and the reports listing inventory activity to determine if there is a change to the valuation not backed up by activity detail, or you can use the inventory activity detail records for each item to see if the value in the field has changed (the current versions of programs affecting inventory subledgers record the value in the Trk field in the inventory activity records they create).
• Transactions have been improperly processed. Use of obsolete programs, improper versions of some programs, and disregard for system design and procedures may cause undocumented or incorrect updates to the Pending subledger.
• Off line editors have been used to change item quantities and or costs in the Pending File. Off line editors do not write to the inventory activity file and improper use of the programs can result in undocmented changes to the Pending subledger.
• Data loss. Loss of Pending or Inventory Activity records can cause the Pending subledger to go out of balance. This occurrence should be extremely rare on a stable system. Recovering from data loss is a complicated procedure which is handled on a case by case basis and is not discussed in this document.