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Reconciliation Process

Prepared by Finance

xxx xxx Training- Reconciliation’s -

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Reconciliation Process

Today’s Agenda:• Introductions

• Reconciliation Basics

• Paperwork

• Reconciliation process

• Contacts• OPI Overview

• Questions

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Reconciliation Process

Introductions

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Reconciliation Process

Reconciliation Basics

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Reconciliation Process

What are inventory reconciliation's?

• The periodic agreement of inventory levels between 2 different physical locations operating on 2 separate inventory systems

• Xxxx’s goal is to reconcile all inventory locations every month

• To achieve this goal the timely submission of paperwork from OPI locations is CRITICAL

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Reconciliation Process

Why are inventory reconciliation's important?

• Accurate Financial Statements

• Accurate inventory levels result in better purchasing decisions and less customer disappoints

• A recent reconciliation ensure prompt resolution of disputes with operators and improves customer relationships

• Not staying current on reconciliation's cost xxxx millions in 2xxx (losses were realized in Fiscal 2xxx for activity in 2xxx and prior)

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Reconciliation Process

Timely Paperwork and prompt issue resolution are the 2 critical factors in staying current on

reconciliation’s

Paperwork

Issue Resolution

=

$ $

$

$$

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Reconciliation Process

Paperwork

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Reconciliation Process

Paperwork Flow

xxxxxx Accounting

• BOLs • Billings for Services (ie Thruput Storage)

• Inventory Activity Report

Daily

To be filed at xxx

Monthly

To be Faxed or Emailed to Acct

xxxx Accounting Mailing Address Accounting Fax

xxxxxxx, LLC xxx-xxx-xxxx

PO box xxxxx

Saint Paul MN xxxxx

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Reconciliation Process

Reconciliation Process Overview

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Reconciliation Process

Reconciliation Process Overview

Day to Day Business

MonthendPaperwork sent to Acct

Accounting Reconciles

Issues Forwarded, Resolved

(Almost perfect world)

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Reconciliation Process

Types of Reconciliation Issues

Day to Day Business

MonthendPaperwork sent to Acct

Accounting Reconciles

Shrink

Sales or Billing

Receiving/Other

Types Explanation

Sales (Customer Billings) that should have been billed, but were NOT, by the warehouse, xxxxxx or both.

When shrink is taken at a warehouse (via paperwork sent in to Acct), the Operation Manager needs to signoff on an SAR form to adjust inventory.

Receivings that should have been processed, but was NOT, by the warehouse, xxxxxxx or both.

Issues Forwarded,

Resolved

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Reconciliation Process

Reconciliation Process Overview

Day to Day Business

MonthendPaperwork sent to Acct

Accounting Reconciles

OperationsManager

shrin

k

Billing Issues

AccountingRecv/Other

ASC

As part of the reconciliation process Accounting will determine where issues need to be forwarded

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Reconciliation Process

Accounting will forward issues using the Inventory Reconciliation Report via Email

INVENTORY RECONCILIATION REPORT

Op Mgr:ASC:

WC# 386206 CSR:Reconciler:

PC#918532-28%

Date Description Order #AgriliancePerpetual

Devils LakePerpetual

RespDept ACTION TAKEN

12/31/2002 ENDING BALANCE 150.0000 30.0000

12/29/2002 Sale not on xxx 999999 -25.0000 ASC

12/15/2002 Sale not on xxx 12345 25.0000 ASC

12/31/2002 Shrink -10.0000 OP MGR

12/25/2002 Receipt not on xxxxx Lake BN 9876 98.0100 ASC

12/6/2002 Error in Balances -38.0100 ASC

12/9/2002 Duplication Formulation -50.0000 ACCT

RECONCILED BALANCE 90.0000 90.0000 0.0000

Note that 2 of the 6 items on the illustration do not need to be resolved by the ASC

The Reconciliation Process Assumes Issues are resolved by the ASC unless otherwise

communicated

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Reconciliation Process

Paperwork Flow

ASCOPI Accounting

• BOLs • Billings for Services (ie Thruput Storage)

• Inventory Activity Report

Daily

To be filed at ASC

Monthly• Reconciliations WorksheetMonthly

To be Faxed or Emailed to Acct

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Reconciliation Process

The schedule below lists the types of paperwork sent from xxx warehouse locations (OPIs) and the appropriate destination

What's sent From Who When (business Day) To Where Contact InfoInventory Activity Report OPIs and Leased Monthly by the 5th Accounting See Below

[see appendix A] Warehouses for Address and FAX

Bills of Lading xx 1 Business day ASCs * See AttachedReceiving Reports after OPI ActivityShipping Reports

Billing xx Monthly Accounting See Belowfor Services (Thru-Put/ for Address and FAX/Storage Fees)

* ASCs are responsible for processing OPI BOL's, consignment activity and formulations

Accounting Mailing Address Accounting FAX

Fax to ASC then ASC Faxes to Agriliance Accounting

Fax to ASC then ASC Faxes to Agriliance Accounting

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Reconciliation Process

Our Goal for issue resolution is with in 5 business days of receiving the Inventory

Reconciliation Report

OPI Paperwork

ASC Issue Resolution

=

$ $

$

$$

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Reconciliation Process

Contacts

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Reconciliation Process

Accounting Contacts

X5167X5331X5419X5187X5336

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Reconciliation Process

OPI Procedures for Taking ShrinkStep 1 Fill in Inventory Activity Report for requested amount of shrink (tons

and volume since last shrink).

Step 2 Send in Inventory Activity Report to xxxx Accounting on a monthly basis as normal.

Step 3 Upon the reconciliation of inventory by xxxx Accounting, a Shrink Adjustment Request form (SAR) is filled out.

Step 4 SAR form is sent to appropriate Operations Manager for approval.

Step 5 Operations Manager approves SAR or addresses issues with OPI manager.

Step 6 Operations Manager sends SAR back to Accounting with appropriate signatures

Step 7 Accounting requests appropriate Finance signatures when necessary

Step 8 Accounting adjusts inventory in Impact

Step 9 Accounting communicates SAR adjustment to OPI

Involves OPI

Involves OPI

Involves OPI

Involves OPI

Reference Appendix A

for an example of an Inventory Activity Report