Internal Accounting Controls

Overview

Internal controls establish safeguards to company’s assets and minimize the likelihood of errors to go undetected in company’s daily operations.
Internal controls help to prevent errors and misstatement of financial statements as well as to understand and preventing risks.
Rise SA Business Solutions has identified the importance of internal control to a business and built in its own set of system internal controls in order to help identify incorrect treatment of a transaction. The system records all transactions in different registers according to the nature of the transaction. If a transaction is of one nature and the user treats it differently, the system will warn the user of a potential error.

Accessing Internal Accounting Control Report

To access internal accounting controls:
1. Go to Accounting.
2. Click Internal account controls.
3. Click Set up... to select the fields you would like to control.
This will give you a list of available fields. It is divided into 4 categories:
Accounting settings:
Main settings setup completion: all settings which include default currency, email account, first month of the fiscal year, and all default accounts must be set.
Bank:
  • Bank Stream records duplication: duplicate transactions were not found in Bank Stream.
  • Bank documents duplication: duplicate documents were not found after approving.
  • Bank data integrity control: there are no discrepancies between the bank account transactions in General journal and the amounts in the Bank reconciliation register.
  • Balance of undeposited funds: there are no undeposited funds recorded in the Cash Account.
Accounts receivable/ payable:
  • Tax invoices overpayment control: there are no overpaid tax invoices in the system.
  • Supplier invoices overpayment control: there are no overpaid supplier invoices in the system.
VAT:
  • VAT submission covering all submission periods: VAT submission documents covered all tax periods.
  • VAT submission includes all documents: There are no documents which were not included in VAT submission.
  • VAT data integrity control: There were no discrepancies between the VAT amounts reflected in the General journal and the amounts in the VAT register.
4. To choose a control, select the checkbox on the left. If you do not select a field, the system will not check whether you have such errors or not.
5. After you select all the necessary controls, click Hide Settings to continue.
6. Enter the date range and click Run Report.

Deactivating Controls

If the system has a control that you are not interested in, you can deactivate it. This means that the next time you run the report, this control will no longer appear.
To activate it again, click Set up and select the checkbox to select the control.

Excluding List of Possible Documents Causing Errors

You can exclude the list of possible documents that cause the error.
Open the control with an error and open the list of possible causes. Click Exclude the list of documents for further control. The next time you generate the report, the list will not be available.

Color Indication

The system will indicate the controls which have errors using different colours.
Light red indicates that an error was found.
Light green indicates that there are no errors found.

Accounting Settings Control

This control checks that default accounts are selected in the system. Selecting default accounts will help the system understand where certain transactions can automatically go to. For example, if you would like to import opening balances for a supplier or customer, you need 2 accounts: the Customer/supplier control account and the Opening balance account.
If the Opening balance default account is not set, you will get this error when posting documents:
This control will determine whether there are any empty accounts left to be filled to avoid future errors. It will give you the error name, its reason, as well as a recommendation how to fix it. In the Recommendation field, it will redirect you to the interface where you can set default accounts and settings.
Click Settings to go to the window where you will be able to continue. If you click the plus button in the bottom left corner of the Recommendation field, it will list all the details of the error found.

Bank Controls

There are 5 types of bank controls:

Bank Stream Records Duplication

This control checks whether there are any transactions that have been duplicated. This could be a duplication in the csv file, or the transaction was imported from a csv file or the online banking.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations. If the system finds an error, the recommendation would be to find duplicates in Bank Stream and exclude them.

Bank Documents Duplication

This control checks whether there are any documents that have been duplicated after approving transactions in Bank Stream. This is a system mistake, not user mistake. The system might create 2 receipts or payments instead of 1.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations. If the system finds an error, the recommendation would be to check the list of possible document duplications and mark them for deletion.

Balance of Undeposited Funds

This control checks whether there are any cash documents that have not been deposited into the bank. This means that the Cash Account has an amount on hand that has not been transfered to the main bank account.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations. If the system finds an error, the recommendation would be to check whether the receipts are valid and create deposit documents. If the receipts are not valid, make sure they are marked for deletion.
Click Deposit to create a new deposit document or to check if there are any deposit documents that have not been posted. If you click the plus button in the bottom left corner of the Recommendation field, the system will list the receipts that have not been deposited to let you know which receipts cause the problem. You can double-click the receipt to open it.

Bank Data Integrity Control

This control helps identify whether some transactions have been posted incorrectly . This could be due to an exchange rate error or an internal error when recording the document. This is the reason why the bank balance and ledger balance in Bank Stream differ.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations. If the system finds an error, the recommendation would be to open the listed documents and post them again. After this, run the Internal accounting control report again and the error should no longer be there for that specific document.

Income and Expenses Integrity Control

This control indicates whether there is a payment received to the schools account but not matched to an invoice or advance income account. It states that the Advance Income Account in Cash flow data register must not be empty.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations. If the system finds an error, the recommendation would be to check the list of documents and, if possible, specify the Advance Income Account.

Accounts Receivable/ Payable Controls

This control is divided into 2 categories:

Tax Invoices Overpayment Control

This control helps identify whether there are any tax invoices that have been overpaid. This means that the invoice has more money allocated to it than it should. For example, there is an invoice for R100, and an invoice payment document of R150 has been allocated to it so R50 were overpaid.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations. If the system finds an error, the recommendation would be to open and examine the tax invoice to make sure that the initial amount charged is correct. If everything is right, the next step will be to either unapproved the transaction from Bank Stream and reallocate it again bearing in mind the actual invoice amount, or to create a journal to remove the overpayment from the invoice to another account.

Supplier Invoices Overpayment Control

This control helps identify whether there are any supplier invoices that have been overpaid. This means that the invoice has more money allocated to it than it should. For example, there is an invoice for R100, and an invoice payment document of R150 has been allocated to it so R50 were overpaid.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations. If the system finds an error, the recommendation would be to open and examine the supplier invoice to make sure that the initial amount charged is correct. If everything is right, the next step will be to either unapproved the transaction from Bank Stream and reallocate it again bearing in mind the actual invoice amount, or to create a journal to remove the overpayment from the invoice to another account.

VAT Controls

This control is divided into 3 types:

VAT Data Integrity Control

This control identifies whether the VAT register and the General journal have the same amounts recorded for each transaction. It makes sure that at the end of the period, the register and General journal balance. If they don’t balance, there was an error when posting the document. This is not a user error but a system error.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations.

VAT Submission Covering All Submission Periods

This control helps to identify whether there is a VAT submission document created for each tax period of the year. If there is a tax period missing, the system will notify the user of it.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations. If the system finds an error, the recommendation would be to create or post the VAT submission document for the missing periods.

VAT Submission Includes All Documents

This control helps to identify whether all documents that affect the VAT control account have been included in the VAT submission for the period. It will determine if there are documents that have been missed or have been created after creating the VAT submission period.
This feature will give you the error name, its reason, as well as a recommendation how to fix it. If there are no errors, there will be no recommendations. If the system finds an error, the recommendation would be to refill the VAT submission document to include the missing documents if the period is not closed. If the period is closed, include these documents in your next submission.

Status of Internal Accounting Controls

The documents in the system will inform the user about the latest internal control check that was carried out.
For example: VAT Submission.