1. Purpose
This SOP details the step-by-step procedure for preparing the monthly management accounts for Easyterms. It aims to ensure consistency, accuracy, and efficiency in the financial reporting process.
2. Scope
This SOP applies to all finance personnel responsible for preparing and reviewing monthly management accounts.
3. Related Policies
Management Accounts Preparation Policy
Cash Management SOP
Anti-Money Laundering (AML) Policy (Relevant for bank reconciliations)
Customer Data Privacy Policy
4. Roles and Responsibilities
Finance Officer/Accountant: Primary responsibility for executing steps, preparing journals, and compiling reports.
Senior Finance Officer/Manager: Reviews prepared accounts, performs sanity checks, and addresses anomalies.
Loan Officers/Collections Department: Provide necessary reports from the loan platform.
5. Procedure: Monthly Management Accounts Preparation
5.1 Prerequisites Completion
5.1.1 Bank Reconciliation: Ensure CIBC, Fidelity, and Undeposited Funds are reconciled. Note: Validate that any month-end balance in Undeposited Funds is shown as deposited in the following month’s statement.
5.1.2 Loan Book Balancing: Confirm the loan book ledger balance matches the accounting system's Balance Sheet (1160) via the Loan Aging Report.
5.1.3 Accounts to be Cleared: Clear/balance Cash posting suspense (1099), Posting suspense (1430), and Payment refunds pending (2190).
5.1.4 Bill Posting: Ensure Petty cash and vendor bills for open purchase orders are posted.
5.2 Initial Report Generation and Checklist Creation
5.2.1-5.2.3: Generate Balance Sheet and Income Statement (current vs. prior month). Export to Excel and consolidate into a single checklist with checkboxes for each line item.
5.3. 1
5.3.2
Validate the total figure of the aged receivable summary- grouped report against the amount shown on the balance sheet.
5.3.3
5.3 Balance Sheet Line-by-Line Validation
5.3.2-5.3.3 Accounts Receivable: Validate against the Aged Rec. Summary (grouped) and Loan Platform totals.
5.3.4 Accrued Interest and Fees: Split figures between Private and Government sectors. Create an auto-reversing journal. Note: Round off cents (remove cents from figures). Attach screenshots of both loan books.
5.3.5 CFAL Account: Log in to check balance. Post a manual journal for the difference.
CRITICAL: Do not round CFAL figures. No Reversal on this journal. * 5.3.8 Reserve for Bad Debts: Obtain split figures. Create an auto-reversing journal. Note: Take off cents and round off pennies. * 5.3.9 Reserve for Specific Bad Debts: Generate a non-grouped report. Filter from 0 to Any and exclude negative balances. In the export: Remove Percentages Row and Description column. Post as an auto-reversing journal.
5.3.10 Security Deposits: Download and transpose the schedule. Paste the Pivot Table to the row below. Update only if movement occurred.
5.3.15 Deferred Income for Mitigation Fees: Download the report from the Loan Platform. CRITICAL: Delete the Second Row within the spreadsheet. Create a pivot table to split Private vs. "No Sector" (Gov). Post an auto-reversing journal.
5.3.19 VAT Payable: Compare the Nuclino Sales Tax Report total to the Balance Sheet. Ensure all payables are reconciled.
5.3.21 Dividends: Review for anomalies. Note: Typically a monthly increase of $820,000 (Current year as of 2026 is $408,000).
5.4 Income Statement Validation * 5.4.2 Admin vs. Credit Search Fees: Verify Admin fees are approx. 4x the credit search fees ($100 vs $25).
5.4.4 Interest Income Sanity Check: Calculate:
$$(Interest \div Days \text{ in Month}) \times 365 \div \text{Loan Book Amount}$$
. Answer should be 18%–19%. (No cents needed)
5.4.18 Staff Commissions: Accrue via auto-reversing journal based on the monthly commission report.
5.4.19 Staff Bonuses: Calculate 3% of Net Profit on a Year-to-Date basis. Round to the nearest thousand and post as an auto-reversing journal.
5.5 Capitalization and Depreciation * 5.5.1-5.5.4: Identify capital items (e.g., servers). Run depreciation. Ensure Balance Sheet totals match the Asset Register. For Leased Vehicles, net down the register figures for comparison.
5.6 Accruals and Prepayments Finalization * 5.6.1 Purchase Order Accruals: Run the "Outstanding Purchase Orders Summary." Accrue for slow-billing items (e.g., lawyer recovery fees).
5.7 Final Review and Archiving * 5.7.5 Save and Archive: Save final reports (Budget Variance, Balance Sheet Condensed, Income Statement Audit Presentation, etc.) to the server path: CFO → Management Accts → [Date].