Trust Reconciliations

Created by Allison Cloyd, Modified on Mon, 14 Nov 2022 at 01:07 AM by Allison Cloyd

In this article, you will learn how to reconcile your trust accounts.

 

Overview and Notes

Reconciling your trust account is a very important aspect of compliance and administration. Before we dive right into the creation and processing of reconciliation, it is important to note that there is a monthly lockout applied to the trust reconciliation process within Actionstep. This has three unique implications:

  1. All the days of the previous month must have been reconciled in a separate reconciliation. This means that if your last reconciliation was for the 29th of March, you will need to open a new reconciliation for the period 30 - 31st of March (you can do this against a downloaded bank statement) before you can open a new one for April.
  2. A new reconciliation cannot relate to two different months. For example, you cannot open a reconciliation for the period between the 19th of March - the 18th of April. You will need to set the end date of the reconciliation as 31st March and open a new one for the April period. This also breaches the requirement. 
  3. A reconciliation cannot span for more than a month. That is, you would not be able to open a reconciliation for the period between 29th March - 30th April. This also breaches the requirement. 

 

Creating a New Reconciliation

To create a new reconciliation, navigate to: 

Trust -> Reconciliations -> Create Reconciliation

 

The first thing you'll want to do at this point is to select a trust account to reconcile, from the first available drop-down field. Doing this will open up a couple more fields, and you should end up with something like this:

 

 

There are two ways to reconcile within Actionstep: manual (printed) and electronic. Selecting the 'printed bank statement' option will require you to manually refer between Actionstep's set of transactions and the ones provided to you by your bank, whereas the 'electronic statement upload' option will allow you to upload a copy of the transactions to the system and manage everything from within the page. 

 

 

 

Note: For electronic statement uploads, OFX/QIF file formats are supported. If your jurisdiction discriminates between entry date and transaction date, it is advised that you use manual reconciliations to minimize the chance of error. 

 

Manual Reconciliations

Suppose you are reconciling against a printed or unofficially downloaded bank statement. In that case, you'll need to enter the closing balance as per the statement, so that the system knows to reconcile towards this amount. After that, it is simply a matter of matching any items that are found in both Actionstep and on the bank statement, as per the screenshot below.  

 

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To match an item, click on the  icon found under the 'Match' column to toggle it to the 'matched' status - it will then be highlighted in green as per the screenshot above.

We suggest you highlight or mark off each transaction on your printed bank statement as you reconcile them and then upload a copy of the bank statement to the reconciliation so that an auditor can see that you have physically compared the bank statement to the transactions in Actionstep. You can do this by taking a scan of the physical bank statement and saving it to your computer and then uploading it to the completed reconciliation. 

 

Electronic Reconciliations

Electronic reconciliations are almost identical to manual reconciliations in terms of the way that they are processed - the only difference is in the appearance of the matching menu, as per the screenshot below. 

 

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When using electronic reconciliations, you have the ability to toggle between an 'Actionstep View' and a 'Bank View' to quickly identify which transactions are from missing from either perspective.

 

 

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Adjustments

If there are any transactions that have been entered outside of the reconciled period that account for some of the discrepancies between system entries and bank statement items, you will have to create adjustments.

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WARNING: If you are creating an electronic reconciliation, you do not have the option to make adjustments. If you're creating a manual reconciliation, you do have the option to make adjustments.

 

 

Next Steps

When you have matched all entries and the reconciliation is fully matched, click on the big green Fully Matched button to proceed to the next step. 

 

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Assuming there are no adjustments to account for, you should see a page that looks somewhat similar to the one shown below:

 

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At this point, you can click on 'Save + next' to continue or 'Save + return to matching' to save any adjustment entries and return to the matching screen. Once you have clicked 'Save + next' you will be taken to the 'Reconciliation Summary' page where you will see a summary of all the reconciled receipts/withdrawals and any adjustments. You can then click 'Complete Reconciliation' to lock it and prevent it from being edited any further.

 

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Uploading documents against your reconciliation

You may want to upload various documents to your reconciliation once it has been completed. This could be the bank statement with your edits if you are completing a manual reconciliation, or if there are some adjustments that have additional documentation so your auditor can easily access this. To do this go to the trust reconciliation list. Trust > Reconciliations > Reconciliations List - find the reconciliation on the list and click on the paperclip. 

 

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Then upload your file and click Save

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