Month-end reports are essential for keeping a firm grip on an organization’s financial health. Certain processes produce a trail that deters fraud and tracks expenses before they get out of hand. The following are seven suggestions for a month-end reporting policy:
- Ask authorized signors to review monthly bank statements and investigate any unusual items. (Have a copy of checks instead of just check numbers on the statement.)
- Segregate the bank reconciliation preparation function from accounts payable.
- Set up an independent function for reviewing: bank statements, reconciliation, and trial balances. The independent person, such as the Treasurer or Executive Director, should also compare accounts receivable and accounts payable to the trial balance.
- Compare actual income and expenses to the budget. Investigate any unanticipated variations.
- Review the detail for general journal entries.
- Verify payroll withholdings are remitted in a timely manner.
- Put interim financial reports on the agenda for board review.
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