Control Account and Balance Sheet Values
A balance sheet, at a given date, reflects a company’s net worth as the difference between the sum of its asset and liability values.
A company’s fixed asset values could run into many millions of dollars and include substantial and extensive investments in properties, plant, vehicles, furniture and equipment.
While detailed records of costs and depreciation provided are maintained for each and every asset, fixed asset control account balances, (which of necessity need to be shown to agree with the sum of the corresponding detailed asset values), are recorded in the balance sheet.
A company cannot operate without working capital which, in the balance sheet, is reflected as the sum of the following control account balances that, as with fixed assets, need to be shown to agree with the supporting detailed records which in turn are substantiated with reference to external documentation. The detailed records, particularly for the medium and larger companies could annually record many thousands of transaction entries.
Cash and Bank Balances
Cash books may record details of thousands of payments and receipts annually which need to be reconciled and agreed with the corresponding entries in one or more bank accounts.
Customer Account Balances
Sub ledgers maintain details of large numbers of transaction details in customer accounts which are checked against and reconciled with the corresponding customer records.
Cost of Inventory Items on Hand
Inventory sub ledger records maintain details of a very large number of transactions in inventory accounts. (Inventory account on-hand quantities are checked against physical counts.)
Costs Incurred on Production Work in Progress
Details of all production costs incurred are recorded in a sub ledger which is maintained to reflect the costs of incomplete jobs.
Supplier Account Balances
Suppliers, by providing credit, contribute towards the funding of working capital.
Supplier sub ledger records maintain details of a large number of transactions in supplier accounts which are checked against and reconciled with the corresponding supplier records.
Importance of General Ledger Control Accounts
The sum of general ledger control account values reflects the bulk of stakeholder investment in the company and the integrity of the balance sheet may be seriously compromised where control account values differ from the supporting detailed records.
DataRapt’s automated functions are designed to identify variances daily and to email details to the parties concerned. This allows for corrective action to be taken timeously. With DataRapt, whatever the size of a company, there is no reason for balance sheet values to ever differ from the supporting detailed records.