YEAR END AUDITS – LET SAGE 300 CARRY THE BURDEN
Why does this happen and continue from one audit to another?
Bank reconciliations in regular intervals would be performed as the cash and bank balances are considered to be highly vulnerable where the most audits and transparency is required. 90% of the other transaction items in the balance sheet and the income statement rarely get the nearest importance of audits as bank reconciliations. Especially when the audit happens once a year, the accountants find it hard to prove the material accuracy of financial statements, as they should have auditable evidence to support every line item on the balance sheet as well as key revenue and expense accounts.
The auditors request client prepared schedules and this may include;
- Bank reconciliations
- Accounts payable aging
- Accounts payable transactions listing
- Accounts receivable aging
- Accounts receivable transactions listing
- foreign exchange gain and loss reports
- Inventory movement and balances listing
- Fixed assets schedule etc
Danushka De Silva
Senior Manager – Enterprise Business Solutions
Preparing this information at each year audit is a challenging task and it demands a lot of time and concentration which can affect the day to day operation of the business. One of the best methods to minimize this work load is to establish an internal accounting review which simulate the year end audit and maintain the key accounting schedules on an on-going basis. Enforce a policy that sub ledger schedules are generated monthly and tally them with the GL control accounts. Consistent review process would ascertain the transactions are accurately recorded and always be supported by the verifiable evidences. Undoubtedly such a mechanism would make the accounting and finance team lives easy as they have already prepared most of the schedules auditors may request.
In an environment that a robust system is in place with the users who know how and when to generate the accurate schedules, implementation of this year-round audit process is very much a practical solution. Sage 300 is equipped with number of reporting options to help build and maintain year-round accounting review structure that would ease and simplify the year end audit agitation and efficiently improve the business intelligence of the company.
General Ledger Reports
Being the core accounting module in the ERP, GL trial balance and the Transaction Listing report provides majority of the audit trails. Generated in crystal reports preview but anytime can be converted to an MS Excel file on which further analysis could be done. As a renowned accounting software, previously known as Accpac now Sage 300 ERP, the fundamental logic has been developed that each monetary transaction would result in a double entry in the General Ledger. Trial balance simply provides the ending balance of each GL account for a specific period. Transaction listing report details out the line wise entries in a GL account from the sub-ledgers and the general ledger. This can be generated for a specific account, accounts groups or using specific transactional analysis dimensions to create the desired schedules.
Quite often auditors inquire the directly posted General Ledger Journal Entries, Posting Journal report can provide the evidence along with the source journal report. This can be further strengthened with customized crystal report for Journal Vouchers. Any correction entries would be facilitated with the audit trails of posting journal errors.
Financial Reporter is another fantastic tool built in General Ledger Function. Through macros Sage 300 pull out the general ledger data to predefined MS Excel templates. This template creation doesn’t need any programming skill and it brings enormous flexibility to customize the reports. Accounting schedules and reports could be varying from auditors’ requirements to the MIS demanded by other stakeholders. Since the users are enabled to do their own reports, Financial Reporter has gained much popularity among the Sage 300 users as a powerful tool to provide the ad hoc accounting schedules as and when auditors demand.
The strong architecture of Sage 300 ERP has been one reason that it has been established in the market as one of the leading financial management software for over 30 years. Many of the financial and operational modules can be just plugged in and seamlessly integrate with the general ledger including the third party build add-on products.
Common schedules that auditors seek are readily available within Sage 300. Accounts receivable module provides the customer age analysis and customer transactions listing. Deposit slips report is a cross check for the bank receipt transactions. Accounts payable module provides vendor age analysis and vendor transactions listing. Check register is useful when reconcile with the bank for the payment made. Inventory movement report, inventory valuation, aged inventory analysis, mark up analysis, sales statistics are some of the top audit picks that Sage 300 provides out of the box.
Generally, auditors are skeptical on the procurement function of the organization there are many internal controls also revolved around that. Purchase requisition to supplier payment made should have clear cut evidences for each transaction takes place. Sage 300 is very strong in this area and the base module is designed in such a way Requisition to PO, PO to GRN, GRN to Supplier invoice and then to the payment. This 3-way PO matching is one of the top prioritized procurement audit elements where Sage 300 assist perfectly. Purchase order module provides strong reconciliation
Sage 300 Document Attachments
Sage 300 provides number of document attachment solutions. They can effectively enhance the ERP by providing space to attach the source documents and retrieve them subsequently as and when required. Document management solutions allow the users to link scanned documents to Sage 300 and seamlessly integrate with common document management systems that they may already be using, such as One Drive, O365, Gdrive, etc. Sage 300 document attachment capability plays a vital role during the audit. When auditors request the proof of transactions, it’s very easy to provide them as the source documents are stored along with the transactions.
Final audit season should not create unnecessary pressure and unbearable workload. Sage 300 provides many straight forward audit reports which easily reconcile the sub-ledger balances with the general ledger. By default, there are key information captured the entered user, at what time stamp, deleted by who, etc. That can be further intensified by advanced modules like audit logger which can provide the audit snaps of changes of information. Eg: If a master file has been modified, what was the status prior to modification and done by which IP address. These strong controls in place proficiently make sure the audit goes smoothly.