Bank Statement Reconciliation

DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation DON Purchase Card Certification Course Lesson 4, Part I Bank Statement Reconciliation WinSALTS Cardholder Course 1 November 2005 This is lesson 4, part 1 of the Purchase Card, Cardholder WinSALTS Certification Course. Please click the forward arrow to review this lesson’s objectives. 1 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation DON Purchase Card Certification Course Lesson 4, Part I Learning Objectives Upon successful completion of this lesson, you will be able to: • State the requirement for maintaining a Purchase Log • List the minimum requirements for each Purchase Log entry • State acceptable methods of payment for Cardholder returns • State Cardholder’s monthly reconciliation responsibilities • State the purpose of the reconciliation process • Use WinSALTS to review and reconcile transactions 2 November 2005 Previously, you were shown how to become a Purchase Cardholder, make purchases, and handle transactions with your Purchase Card. This lesson will cover the objectives shown here and demonstrate how to reconcile your bank statement. As you can see, there are a number of forms and procedures required to properly reconcile your bank statement. This lesson will help you better understand the process. Before proceeding, read over these objectives. When you finish this course, you will be tested on these objectives and the objectives of the other lessons. When you are confident that you understand the objectives, click the forward arrow to continue. 2 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Maintaining a Purchase Log Purpose of the Purchase Log: • Provide documentation to support certification process • Gives backup data 3 November 2005 The Cardholder is required to maintain accurate records of all Purchase Card transactions. This topic explains why maintaining a Purchase Log is required, lists the minimum entry requirements, and discusses the acceptable methods of payment for Purchase Card returns. The primary purpose of the Purchase Log is to provide documentation to support the monthly invoice reconciliation process. The log gives you the necessary backup data to confirm the accuracy of your monthly statement from Citibank. Please click the forward arrow to continue. 3 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Maintaining a Purchase Log The Purchase Log: Manual Automated Documents individual card transactions Entries made for card transactions/convenience checks 4 November 2005 The Purchase Log can be either manual or automated. For example, some cardholders maintain their purchase log as an Excel spreadsheet. The Cardholder uses the log to document each individual card transactions. Entries must be made for card transactions and for any convenience checks written against the account. Please click the forward arrow to continue. 4 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Maintaining a Purchase Log Entries supported by: • Request for procurement document • E-mail request This documentation provides an audit trail 5 November 2005 Each Purchase Log entry must be supported by appropriate internal documents such as procurement or E-mail requests. These documents provide an audit trail, which supports your decision to use the card to make the acquisition. The documents will also show all special approvals that you obtained. Click the forward arrow to continue. 5 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Maintaining a Purchase Log • • • • • • • • • • • 6 Order Date Merchant Name Amount Description Date Received Receiver Name Pay & Confirm Credit Received Dispute Status Sources Screened Sources Used THE CARDHOLDER SHALL ACCEPT CREDIT ONLY, NOT CASH, FOR RETURNED ITEMS INITIALLY PURCHASED USING A GOVERNMENT PURCHASE CARD. November 2005 At a minimum, the Purchase Log should contain the following twelve columns for each transaction. These entries are the order date, the merchant’s name, purchase price, item description, the date of receipt, name of receiving person, paid but not received status, credit received, and disputed status. In addition, the purchase log should have columns to record that mandatory sources were screened, mandatory sources used and not used with an indication as to why. And, finally, the purchase card log should be maintained by billing cycle, not calendar month, in order to reconcile with the bank statement. One of the columns is “Credit Received”. Keep in mind that you can accept credit only, not cash, for returned items that were initially purchased using a Government Purchase Card. Please click the forward arrow to continue. 6 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Review & Reconcile All Transactions The reconciliation process: • Begins immediately upon receipt of statement • Compares records against statement • Verifies charges, credits, outstanding disputes, refunds, annotation of discrepancies, etc. 7 November 2005 Your purchase log is used to review and reconcile all transactions on your monthly statement. As a Cardholder, you have certain responsibilities for your Purchase Card account one of which is the monthly reconciliation of the bank statement. During the reconciliation process, compare your records and documentation against the electronic eStatement provided by Citibank. Immediately upon receipt of the monthly eStatement, you must review all information, and verify charges, credits, outstanding disputes, refunds, or any other items that appear. What if you’re unable to review the statement, for example, you are on leave? Click the forward arrow to review this situation. 7 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Reviewing and Reconciling All Transactions If unable to review eStatement: • AO or AO designate can review and certify • Cardholder still responsible for review 8 November 2005 If you are unable to review your monthly eStatement for any reason, your Approving Official or designated AO is responsible for the review and certification. You are still responsible, however, for reviewing the monthly statement, even after your AO has performed a review. This backup approach helps the Navy avoid unnecessary interest charges and reduces the number of delinquent accounts. Please click the forward arrow to see an introduction to statement reconciliation using WinSALTS. 8 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Reviewing and Reconciling Transactions Download the entire WinSALTS Navy Purchase Card Desk Guide from: www.salts.navy.mil 9 November 2005 The next six slides are a brief introduction to the reconciliation process using WinSALTS. There are two other more comprehensive treatments of this topic available. The WinSALTS Navy Purchase Card Desk Guide is available from the website listed here, namely www.salts.navy.mil. In addition, there is a supplemental narrated, training lesson titled “WinSALTS Purchase Card Statement Certification” available at the CCPMD Purchase Card Training web page. This brief introduction reviews the major steps involved in bank statement reconciliation using WinSALTS.. Please click the forward arrow to continue. 9 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation The WinSALTS CITIBANK E-Statement Viewer 1. Highlight Cardholder’s Name 2. Print list of cardholder transactions by clicking “Print Cardholder”. 10 November 2005 Your monthly bank eStatement will be delivered over the SALTS network. WinSALTS is the Windows-based software which allows you to work with your eStatement. The WinSALTS CITIBANK E-Statement Viewer is shown here. This is the tool which allows the AO to view the content of the bank statement and to review each transaction for each cardholder and to then certify the statement for payment. Before the AO does any reviewing or certifying, each cardholder must reconcile the estatement transactions against purchase card logs and documentation. The AO can print a hardcopy of transactions for each cardholder to review. First, select the cardholder name as shown here. Then click the “Print Cardholder” button. The printed hardcopy statements can then be given to the individual cardholders for reconciliation. Click the forward arrow to continue. 10 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Cardholder Reconciliation • AO Creates Cardholder Transaction List: Use E-statement View to create a list of transactions for each cardholder to use to reconcile with the Purchase Log and other documentation. • Cardholder Verifies LOAs and SDNs: The cardholder should verify that the Line of Accounting (LOA) and Standard Document Number (SDN) for each transaction are correct. If not, then annotate the correction on the printout. • Cardholder Reconciles All Transactions: Upon completion of the reconciliation, the cardholder should sign and date the printout and forward to the AO. 11 November 2005 Before the AO can certify the E-statement as OK to pay, the cardholders must reconcile each transaction against the purchase card log and other documentation. The AO uses the E-statement viewer to print a list of each cardholder’s transactions. Each cardholder must reconcile the list with the Purchase Log and the accompanying purchase documentation. The cardholder should verify that the Line of Accounting and Standard Document Number for each transaction are correct. If not, then annotate the correction on the printout. Upon completion of the reconciliation, the cardholder should sign and date the printout and forward to the AO. 11 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Certification Using WinSALTS 12 November 2005 When the cardholders complete the reconciliation and have returned the signed transaction summary reports to the AO, it’s time for the AO to use the WinSALTS CITIBANK E-statement Viewer to review and certify the bank statement. Re-open the SALTS statement file by clicking on DATA SERVICES, NAVY PURCHASE CARD and NPC CERTIFICATION on the SALTS menu line as described earlier. This will open the SELECT IMPAC FILE TO PROCESS box. The AO selects the location where the IMP file was saved, highlights the file and clicks OPEN or double clicks on the IMP filename. This will open the CITIBANK ESTATEMENT VIEWER. Click the forward arrow to continue. 12 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation DON Purchase Card Certification Course Lesson 4, Part II Bank Statement Reconciliation WinSALTS Cardholder Course 1 November 2005 This is lesson 4, part 2 of the WinSALTS Cardholder Certification Course. Please click the forward arrow to continue. 13 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation DON Purchase Card Certification Course Lesson 4, Part II Learning Objectives Upon successful completion of this lesson, you will be able to: • State the meaning of Two-Way Separation of Functions • Identify the types of statement issues requiring the Cardholder to notify the AO • List the requirements to document statements • State the policy regarding resolution of questionable transactions with the vendors • State the Pay and Confirm policy • List the 2 main benefits of the Pay and Confirm policy 2 November 2005 Before proceeding, read over the training objectives listed here. When you finish this course, you will be tested on these objectives and the objectives of the other lessons. First, let's take a look at two-way separation of functions. Click the forward arrow when you’re ready to continue. 14 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Two-Way Separation of Functions The Two-Way Separation of Functions is defined as: • One person making the purchase with the Purchase Card and • Another person receiving, inspecting and accepting the purchase item. 3 November 2005 In order to protect the integrity of the procurement process there must be, at a minimum, a Two-Way Separation of Functions for all Purchase Card transactions. The Two-Way Separation of Functions is defined as one person making the purchase with the Purchase Card and another person receiving, inspecting and accepting the purchased item. This basic check and balance helps to maintain the integrity of the program. However, there are situations where the cardholder makes the purchase and takes possession of the goods. Click the forward arrow to see how these situations should be handled. 15 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Verifying Receipt of Goods or Services If Cardholder picks up material: • End user or • Designate must sign 4 November 2005 In cases where the cardholder is picking up the material at the vendor’s location, the end user or other designated receiving personnel shall legibly print their name and title, then sign and date the receipt confirming independent receipt and acceptance of the material or services. In the cases where the cardholder must send and receive an email, encryption, electronically signed email is required to replace a hard signature. This is a double check on the accuracy and integrity of the acquisition. Sometimes the cardholder is the end user. Click the forward arrow to see how to handle situations where the cardholder makes the purchase, picks up the goods and is the end user. 16 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Verifying Receipt of Goods or Services If the Cardholder is the end user:.. • May sign the contractor/store receipt However……. • Must obtain co-signature of another Government employee 5 November 2005 In the event the purchase cardholder is the end user, the purchase cardholder may sign the vendor receipt. However, the purchase cardholder shall ensure another Government employee within the command co-signs the receipt and lists their printed name, title and date. Please click the forward arrow now. 17 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Verifying Receipt of Goods or Services The Cardholder is responsible for ensuring the independent receipt of all goods and services. 6 November 2005 The bottom line regarding the receipt of goods and services purchased with the purchase card is this. The cardholder is responsible to ensure that independent receipt of goods and services takes place on all Purchase Card acquisitions. Click the forward arrow to see how to handle bank statement discrepancies. 18 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Notify AO of Statement Discrepancies The Cardholder must notify the Approving Official of any discrepancies found in the bank’s statement. Notification must be: • Immediate upon receipt of the monthly statement, and … • In writing 7 November 2005 I’ll be right over with the documents. As a Cardholder, you are ultimately responsible for all Purchase Card transactions and for notifying your Approving Official of any information that impacts the propriety of certifying the monthly invoice for payment. As a cardholder, you will most likely be the first government employee to review your monthly bank statement. You should immediately notify your AO of any discrepancies found in the monthly statement regarding material or services received. This notification should be in writing. The question then becomes what to do about the incorrect charge against your account. Click the forward arrow now to review two options. 19 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Resolving Questionable Vendor Transactions Directly contacting the vendor can: • Resolve data entry errors • Reverse inadvertent duplicate charges 8 November 2005 In general, the quickest way to resolve a questionable transaction on your statement is to contact the vendor. The vendor has the ability to fix many erroneous charges that can appear on a statement. Vendors can resolve data entry errors, such as being charged $250 instead of $25, and they can reverse accidental duplicate charges. If you can resolve a billing issue by contacting the vendor, this can save significant time and effort. However, there are time when a charge needs to be formally disputed through the bank. Click the forward arrow and we’ll review this process. 20 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Resolving Questionable Vendor Transactions Disputed Transactions: • Require immediate action • May require contacting Citibank’s Customer Help Desk 9 November 2005 Contacting the vendor may be the quickest way to determine that a transaction needs to be disputed. When you and the vendor disagree about a transaction, you need to take immediate action. In most situations, this involves disputing the transaction and contacting the Citibank's Customer Help Desk. You must also complete, sign and forward a Citibank Dispute Form to the Citibank Customer Help Desk for resolution. Click the forward arrow now. 21 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Tracking Purchases Billed But Not Received Pay & Confirm Policy: • Applies to transactions for which goods/services have not been received • Directs Cardholder to approve payment if goods/services are expected prior to next statement 10 November 2005 The Purchase Card Program includes a policy called “Pay and Confirm”. This policy applies to situations where your monthly statement includes a legitimate transaction for a purchase for which the goods or services have not been received. The policy directs you to approve the transaction payment if there is a reasonable expectation that the goods or services will be received before the next statement. That’s the “Pay” portion of the policy. Click the forward arrow and we’ll discuss the “Confirm” side of the coin. 22 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Tracking Purchases Billed But Not Received In the Pay & Confirm policy, the Cardholder: • Tracks transaction • Confirms receipt • Initiates dispute process 11 November 2005 The “Confirm” part of the policy places the responsibility on you, as the Cardholder, to track the transaction to completion. You must confirm the ultimate receipt of the purchase before the next billing cycle. If the goods or services are not received before the next billing cycle, you must initiate a dispute with the Bank to ensure that you do not miss you’re opportunity to dispute a charge within the 60-day window allowed by policy. Click the forward arrow to review the benefits of the Pay and Confirm policy. 23 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Tracking Purchases Billed But Not Received Pay & Confirm Benefits: • Reduces Number of Unnecessary Disputes • Helps Lessen Delinquencies 12 November 2005 The “Pay and Confirm” policy has two primary benefits. First, the policy greatly reduces the number of unnecessary disputes. Disputes against late delivery transactions can create a significant administrative workload, both to file the dispute and then un-due the dispute when the goods are delivered. If there is a reasonable expectation that the goods and services will be delivered, it’s best to pay the statement. The second benefit of the policy is that it helps to lessen delinquencies since the transaction has already been paid. Click the forward arrow to continue. 24 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation Tracking Purchases Billed But Not Received Pay and Confirm policy benefits simplify the financial process. 13 November 2005 Delinquencies, which are bank-billed transactions that are over 60 days due for payment, are often caused by financial glitches that result from statements with disputed transactions. The Pay and Confirm policy helps to avoid these situations by eliminating unnecessary disputes and the potential glitches with the reversal of the dispute. Click the forward arrow to continue. 25 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation DON Purchase Card Certification Course Review of Objectives You should now be able to: • State the meaning of Two-Way Separation of Functions (REVIEW) • Identify the types of statement issues requiring the Cardholder to notify the AO (REVIEW) • List the requirements to document statements (REVIEW) • State the policy regarding resolution of questionable transactions with the vendors (REVIEW) • State the Pay and Confirm policy (REVIEW) • List the 2 main benefits of the Pay and Confirm policy (REVIEW) 14 November 2005 This concludes Lesson 4 of the WinSALTS Cardholder Certification Course. In this lesson, we have discussed resolving questionable transaction with vendors and tracking purchases billed but not received. Take a minute to review this lesson’s objectives. If necessary, you can click on the word “REVIEW” to return to the relevant area of the training to review that topic. When you are finished reviewing a topic, click the “RETURN” arrow icon in the navigation toolbar to return to this page of the course. When you are confident that you understand the material, click the forward arrow to continue. 26 DON Purchase Card Certification Course Lesson 4: Bank Statement Reconciliation DON Purchase Card Certification Course Lesson 4, Part II Bank Statement Reconciliation WinSALTS Cardholder Course 15 November 2005 This completes Lesson 4 of the WinSALTS Cardholder Certification Course. Click on the “HOME’ icon in the navigation toolbar to close this lesson and return to the main menu. At the main menu, click on Lesson 5 to continue your training. 27