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#2146963 - 09/21/17 02:22 PM Internal bank account reconciling best practice
soundbank Offline
Junior Member
Joined: Mar 2012
Posts: 44
What do you reconcile your internally used dda accounts to?

For example, we have an internal dda used to pay the Holding company directors and our dividends periodically. There is no report to reconcile the bank statement back to.

For this one, I think the only reasonable thing to do is have someone who can not make transactions in the account review the statement and sign off. For example, for a month with dividends paid out of the account, the reviewer can make a reference to the approved dividend amount noted in the BOD minutes. How does your bank handles these?

I ask this because several times I have seen a spreadsheet that just repeats the information and the formulas do the math and get called a "reconciliation".

Any comments are much appreciated.

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Audit
#2146975 - 09/21/17 02:43 PM Re: Internal bank account reconciling best practice soundbank
osucpa Offline
Diamond Poster
Joined: May 2011
Posts: 1,406
For some internal deposit accounts, they are no different than your checking account and reconciling it. For your example above, it would be great to trace the information to the BOD minutes. Does the BOD want an individual to have access to the BOD minutes for no other purpose than declaring the dividend? I can't answer that, this would be a bank decision.

To me the account type you mentioned above is more like a clearing account. Funds go in and then out. The individual would review the account activity for reasonableness. The tracing to minutes is more of an audit function.

Just my opinion.

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#2147919 - 09/28/17 03:39 PM Re: Internal bank account reconciling best practice soundbank
GoneToTexas Offline
100 Club
Joined: Jul 2007
Posts: 135
Texas
Our internal DDA accounts are balanced on a risk-based schedule. For example, certain accounts with a great deal of activity are balanced daily, and others monthly.

For the account that is used to pay dividends, there should be a check register or listing that can be used to mark off checks that have cleared. Outstanding items should be identified and reconciled to the account balance. If you don't do that, how would you know whether you had old outstanding items requiring escheatment?

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