Account Reconciliation Manager Part 3 – Profiles

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April 17th, 2012


This blog post is part of an Oracle Hyperion 11.1.2.2 series covering application highlights as well as a deeper look into different aspects of the new release.

Brief Review

In this Part 3 of my blog series on the Account Reconciliation Manager, “ARM” I will further discuss the use of Profiles and begin to discuss how the reconciliations are performed. In my previous blogs, we learned that ARM is used to reconcile accounts back to their respective source systems. This is accomplished through the use of data maps that are defined in the beginning of the system setup. The maps associate the detail accounts to the summary balance. These data maps are the primary foundation of the application. The data then gets loaded to ARM using these maps, and to load the data, there is system connection to the source systems by using an ERPI data adapter. The maps are defined through unique formats that further define them.

To continue the configuration of ARM, the next step, which I will discuss further in this blog, is the setup of Profiles. Profiles are the direct predecessor to running reconciliation. After discussing Profiles, I will discuss running an actual reconciliation.

Profiles 

Profiles contain the main configuration settings that dictate how and when reconciliations are made. To begin, in every new period, the profiles are copied into that period to create reconciliation, and that reconciliation is a snapshot of the profile at that point in time. The system administrator or authorized power user can only change any attributes that the profile has. I will now discuss some of the definitions in the Profiles.

Profiles – Properties

The Properties section of the profiles contains numerous attributes such as the following, Account ID, Name, Description, Process, and others. I’ll review these next.

  • Account ID – This is the identifier for the profile and is a required field. These are a combination of the ID and segment value and must be unique.
  • Name – This field provides a secondary identifier to the profile.
  • Description – A narrative of the profile
  • Process – This associates the specific reconciliation process such as balance sheet or consolidation process. These are defined in the system setup.
  • Format – This associates the Format with the Profile.
  • Method – This identifies the reconciliation method that is associated with the format associated with the Profile.
  • Risk Rating – This associates the profile with a risk rating. These are setup in the system setup.
  • Account Type – This associates the Profile with an account type. This is setup in the system setup.
  • Normal Balance – This defines the expected balance type, such as either debit or credit. If the balance deviates, the system sends a warning on the reconciliation.

Reconciliation Methods

There are two primary reconciliation methods available with ARM, account analysis and balance comparison. Using account analysis, the profile can be enabled for an automatic reconciliation for a “0” balance. This defines the balance to be expected to be “0”, if it is not, then the reconciliation has to be manually prepared and reviewed, versus if it was “0” the system would do it automatically.

The other possibility is for a balance comparison reconciliation method. The Profile can be enabled for “Balance Comparison Where the Balances Match” automatic reconciliation method. Here again, if the balances either match, or are within the specified tolerances, the system does the reconciliation automatically. If the balances are out of the specified range, the reconciliation has to be manually completed.

This is another feature of ARM that is very powerful. Once the system is properly set up and tested, it almost can run automatically except for the exceptions. The accounting staff is now in a position of managing the reconciliation process more than working it. The staff only has to deal with exceptions rather than the all the reconciliations, thereby decreasing the workload and improving the efficiency of the process.

Another feature within the reconciliation methods is age limits. Each profile can configured for age limits for the transactions where if the exceed the specified range, the reconciliation is flagged for a warning for review.

Workflow

ARM provides a great workflow to manage the reconciliation process. In the initial setup, preparer and reviewer roles are setup by the system administrator. Only the administrator can change these roles, and ARM prevents the same user from being both the preparer and reviewer.

The preparers are specified in their roles during the original setup. The reconciliations they do will be defined by the frequency specified in the system setup. Once the reconciliation is started, the preparer completes the process and it promoted to the reviewer.

ARM supports multiple levels of review. Again, the frequency can be defined independent of the frequency of the reconciliations. There is also a duration for the review. This can be defined by the start date, adding the preparation duration, and then the reviewer duration.

Currency

There are additional buckets for currency within ARM. Again, these are defined and associated with their respective profiles. Additionally, there are several rates types available for this feature.

Summary

As we look at the profile features of ARM, one sees the power in configuring this tool to serve the accounting department in a very powerful and yet secure manner. The profiles are associated with formats, and yet can also be configured for numerous accounting features such as aging, balances, and others. In the next blog of this series, I’ll look at performing the actual reconciliations.

This is the third post in a multi-part series about ARM. Upcoming blog posts will review the product features, setup, and will discuss how companies can leverage this tool to streamline the reconciliation process.

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One comment on “Account Reconciliation Manager Part 3 – Profiles”

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