When business entities work with each other, fulfilling their duties in accordance with concluded partnership contracts, they exchange material and monetary values with each other. These can be one-time or long-term operations. In order to settle mutual settlements and check whether enterprises have debts, it is recommended to draw up a reconciliation report for mutual settlements.
Reconciliation of mutual settlements with counterparties is carried out to clarify the presence of mutual requirements expressed in cost indicators.
According to the current contract, one company supplies another with material assets, provides a service, or performs a certain list of works.
On the other hand, her partner must pay for the goods, work or service received either in cash or in any way established by a signed contract.
For each such action, primary documents are drawn up, on the basis of which all parties to the agreement record the transactions in their records.
Often the considered facts of economic activity are not all produced on the same day. Either shipment occurs in batches, or payment is made in installments.
Since these transactions are reflected by different people over a certain period of time, some of the partners may miss some facts.
Since all organizations must prepare financial statements, reconciliation of mutual settlements must be carried out on reporting dates, which are the beginning of the year, quarter, month, depending on the period for which the report is compiled.
Reconciliation of settlements must be carried out when closing contracts upon their completion, or upon early termination.
Attention! Also, a reconciliation act is necessary when considering disputes in arbitration courts. If the company’s debt is confirmed by this document, which contains the signatures of the debtor, then the judge’s decision will be in favor of the plaintiff.
If bankruptcy is filed and a queue of creditors is drawn up, then the signed reconciliation act with the debtor will be of significant importance.
Rules for drawing up the Act
The initiator of drawing up a mutual settlement act can be any of the parties to the contractual relationship. In addition, if third parties also participate in them (for example, one company makes payments for another), then the initiative to conduct a reconciliation of mutual settlements may also come from it.
“Act of reconciliation of mutual settlements” is necessary in the case when two organizations want to agree on mutual settlements (for payment and delivery of goods, for services rendered, etc.) for a certain period of time. Its official form is not determined by current legislation. Therefore, each organization has the right to develop and be guided by its own acts of mutual settlements. You can download the mutual settlements reconciliation report form for free in several types directly from our website.
We bring to your attention a short video lesson on how to quickly and easily make a Settlement Reconciliation Report yourself in 20 minutes in Excel format:
Forms in different formats can be downloaded for free, without any registration or SMS, using the links located at the very bottom of this page.
A little about this type of documents
Reconciliation acts for mutual settlements are drawn up in two copies. After the accounting department of the enterprise has drawn up a reconciliation report based on its accounting documents, it is endorsed by the signatures of the head of the organization and the chief accountant. They put the seal of the company and transfer it to the other party. His accounting department, having received the reconciliation report, checks it, compares it with its documents and, if necessary, enters its data.
If any discrepancies are identified, information about them must be recorded at the end of the document. If everything agrees, then the counterparty puts his seal, and the manager and chief accountant sign. One copy is sent to your client, and the second is left in your accounting department. After all clarifications and changes have been agreed upon between the two parties, as well as with signatures and seals of both parties. the act acquires the status of a legally significant document.
You can download a sample form of the Reconciliation Report for mutual settlements for free in Word format by following this link:
You can download the same form, but only in Excel format, by following this link:
The act of reconciliation of mutual settlements form download for free in the format “ PDF”You can by following this link. To work with this format “Adobe Reader”:
You can download a sample form for filling out the Reconciliation Report for mutual settlements for free in “PDF” format by following this link.
To government agencies - all these operations involve money.
To avoid errors and discrepancies in the amounts paid by one party and received by the other, reconciliation statements are drawn up. a document that is not related to accounting and is not mandatory for preparation. It is formed at the request of one of the participants in the transaction and declares all amounts, payments and receipts that occur between organizations in a certain period of time.
Basic information about the reconciliation report with suppliers and customers
The act of reconciliation with suppliers and buyers is a declarative document reflecting all payments made between counterparties for a designated period of time: month, quarter, year or the entire period of cooperation. The law of the Russian Federation does not oblige the preparation of such a document. However, in business practice, reconciliation acts are found quite often and are secretly mandatory for registration.
- Carrying out periodic or ongoing reconciliations and recording their results on paper helps business partners avoid errors in calculations and payments, detect and repay debts in a timely manner, and eliminate other financial discrepancies.
- Moreover, if one of the parties owes the other and does not recognize the current situation, the reconciliation act can serve as one of the indirect evidence when filing a claim in court about the existence of a debt, and can also become one of the refutation factors.
When drawing up a paper, it must be certified by the signatures of the managers and chief accountants of both organizations, as well as wet seals. Formed in two copies.
When, the culprit party usually refuses. If during the judicial investigation the counterparty nevertheless certified the protocol, thereby admitting the underpayment, the claim period is reset to zero and begins again.
As already indicated, the law does not provide for the execution of such a document, but such acts are mentioned in Letter of the Ministry of Finance No. 07-05-04/2 dated February 18, 2005 and in Federal Law No. 402. The document belongs to the secondary category, since it does not directly affect the financial condition of any of the partners.
How to draw up a reconciliation report if the supplier and buyer are one person? The video below will tell you about this:
Design features
Rules and requirements
There are no clear requirements for the form of the protocol. Each organization can establish the form of the document independently, approving it with its own. But, there are several aspects, knowledge of which will help you use reconciliation more effectively. If the document is signed only by the chief accountant, and the manager’s signature is not given, the paper is only of a technical nature, the nature of reference information.
In order for the protocol to have legal force, it must be certified by 4 signatures (two from each partner) and official seals of organizations, and also contain certain aspects. The act must contain information about:
- Document title;
- The period covered by the reconciliation;
- The date when it was carried out;
- Operations that are checked;
- Indicators of all calculations;
- Directions to primary documentation;
- Persons responsible for compilation and accuracy.
The presence of such items is advisory in nature, but they will not be superfluous when using papers in court or other authorities. As a rule, the act takes the form of a table in which data such as debits and credits, numbers and dates of primary documents that confirm payment, dispatch and delivery of goods are entered. At the end of the document, the total amount of debits and credits for the period being checked is displayed. The balance is the amount of the difference between receipts and expenses.
A sample reconciliation report with a supplier is discussed in this video:
Discrepancies and verification
If, after verification by the second party, discrepancies are found, they are also recorded after all the data. When conducting reconciliations between buyers and sellers, the recommendations established by the Methodological Guidelines for Inventory of Property and Financial Liabilities are often used. The main task when creating a document is to check and confirm the validity of all amounts entered into the table of the act.
It is mandatory to check “Settlements with suppliers and contractors” for compliance with the corresponding accounts. The following points are recorded:
- Fulfillment of obligations for paid goods in transit;
- Fulfillment of supply obligations;
- Fidelity and support of debit and credit with primary documents.
The drawing up of a corresponding act may be required by both the buyer and the supplier.
- The formation and verification of acts is usually carried out in special accounting programs. If the compiler uses one, then automatically according to the entered form, based on the data already available in the application’s memory of documents. The same check is carried out.
- In the case of a manual verification, all data from the table in the act is verified with the data of the primary documentation and the data available in the documents and reconciliations of the verifying party.
The reconciliation report is a standard protocol for agreements and differences in financial transactions carried out between two organizations. The document does not have a set form or specific requirements; it can be drawn up for use within a partner organization, between partners, or as indirect evidence when considering legal claims for debts. Properly drawn up will help control and regulate all financial relations that arise between them.
The act of reconciliation with the buyer, its features and examples - the topic of the video below:
Compilation Act of reconciliation of mutual settlements It is usually necessary in the case when two legal entities need to certify transfers made between each other. Most often, such reconciliations are made for specific contracts or invoices; reconciliations are also possible for contracts for a certain time period. It is worth noting that despite the fact that this document is not binding and is created only by mutual agreement of the parties, it is widespread in all areas of activity and is used by most organizations.
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Who draws up the act
The reconciliation report can be requested by any of the parties to a transaction. Compilation is usually done by accountants.
An act of mutual settlement is drawn up at the request of one of the parties and its preparation is carried out by specialists from the accounting departments. Before sending a document to a counterparty, it must be signed by the chief accountant or head of the organization, or an employee authorized to sign such documents.
How is reconciliation carried out?
This procedure can be carried out only for one of the following items: name or number of the product, contract, specific delivery, certain period of time. For this document to be reliable, it should be drawn up either after the last transfer or from the moment of delivery. In addition, it is convenient to carry out reconciliation during the annual inventory of the company’s funds and property. Quite often, the results of such checks reveal debts: receivables or payables.
If such facts are confirmed, you need to immediately make a reconciliation report and send it to the partner organization.
Rules for drawing up the act
There is no unified, standard form for drawing up an act, so it can be written in free form or according to a template developed at the enterprise. A regular A4 sheet is suitable for filling.
The act must be printed in two copies - one for each of the interested parties.
Both signed and completed copies are sent to the counterparty, whose specialists compare the information from the sent report with the data they have. If there are no objections to the financial transfers specified in the act, all the information matches, then the counterparty signs the documents and returns one copy and keeps the second one.
If necessary, the act can be certified with a seal, but since 2016, the presence of a seal for legal entities is not a legal requirement (however, without a seal, in the event of legal proceedings, the document may be considered invalid).
To ensure that the process of signing the reconciliation report does not drag on, when sending the document you should indicate the time frame within which it must be returned.
Purpose of drawing up the act
If the information in the document drawn up by the initiator of the reconciliation does not coincide with that available from its counterparty, then the existing discrepancies should be recorded at the end of the document. The same applies to debts: if such facts are revealed, it is necessary to indicate the period during which they should be repaid. Otherwise, the court, if a claim arises, will not be able to take into account the argument regarding the violation of the terms of money transfers.
According to the law, an act of reconciliation of mutual settlements may be grounds for interrupting the three-year limitation period. That is, in cases where the debtor signs a reconciliation report within three years, he is considered to have recognized his debt obligations and is obliged to repay them within the established time frame.
It happens that during the period that has elapsed since the signing of the contract and the fulfillment of obligations, the counterparty has been declared bankrupt. In such situations, accounts payable after a certain time can be written off as expenses of the organization.
Instructions for filling out the reconciliation report
In the “header” you need to enter information about the period for which the reconciliation report is being carried out, and also indicate the agreement that served as the basis for the creation of this document. Here you should enter the name of the companies in accordance with the constituent documents (you can without such details as KPP, INN, OGRN, etc.).
The second part of the document includes a table in which each party enters information contained in its accounting records for transfers under the agreement in question or for a certain period of time. They must match completely. Under the table, each company enters its existing debt. This data must also be the same. If there are no debts, this must be noted in writing.
In conclusion, the document must be signed by the heads of the enterprises, with the obligatory indication of positions and a transcript of the signatures. A document drawn up in accordance with all the rules of office work, if signed by the directors of the enterprises, acquires legal force.
Reconciliation Act- a document reflecting the state of mutual settlements between the parties for a certain period. Today, the current legislation does not provide for a standard form of the mutual settlements reconciliation act and can be developed by the initiating organization using a sample mutual settlements reconciliation act. When drawing up a reconciliation report, it is advisable to adhere to the standard requirements for primary documentation.
The reconciliation report is drawn up by the accounting department and subsequently endorsed by the seals and signatures of the chief accountant and manager. If the document is signed only by an accountant, the document will be of a technical nature and will not be accepted as evidence in court. In this case, when conducting a reconciliation by representatives, in order to give legitimacy to the documents, it is necessary to have the appropriate powers of attorney.
If one of the parties neglects its responsibilities, Reconciliation Act can only be indirect evidence of the debtor’s recognition of the amount or existence of a debt. However, if you go to court, without presenting a reconciliation report, the case will be returned to you due to insufficient requirements.
Evasion from signing the reconciliation act may become the basis for consideration of the case in court, or be considered as evidence of refusal to recognize the debt.
Despite the fact that the legislation does not force the parties to mandatory use of reconciliation acts in the process of cooperation, the importance of conducting reconciliations and signing the relevant acts should not be underestimated. The initiator of the reconciliation can be any of the parties.
It is especially important that a reconciliation act be signed in the following cases:
Carrying out regular transactions or regular provision of services;
- provision of deferred payments;
- high cost of goods or services;
- provision of a wide range of products.
Using the sample filling, as a rule, the reconciliation report is drawn up in the form of a register. Following the filling procedure, 2 copies of the document are prepared and sent to your partners.
After the inventory, the acts are signed, and one option is returned to the initiator.
The information will be most objective if you carry out reconciliation from the moment the cooperation began, or from the moment of the last offset.
For convenience, reconciliations and signing of relevant acts can be combined with the mandatory annual inventory.
In addition, if reconciliations are carried out regularly, you can compare one item that has caused disagreement, such as a specific contract, product article, etc.
Since the law does not oblige your counterparty to carry out reconciliations at your request, the contract may initially stipulate the need to carry out these activities at a certain frequency. After which a reconciliation act must be signed.
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