Before setting up businesses on Brazilian soil, it is interesting for investors to have a deeper understanding of the laws and accounting standards in force in Brazil. In addition, there are practices such as accounting reconciliation, which a tax accountant in Brazil has expertise to provide guidance.
Reconciliation is one of the most important services offered by accounting firms in Brazil because it is extremely useful. But if you, an investor, do not have instructions on how this accounting practice works in the South American country, Europartner explains everything in this article. Learn more!
What is Accounting Reconciliation?
Accounting reconciliation is certainly one of the most relevant processes in the accounting service.
After all, this practice allows the company’s managers to verify that the values of inflows and outflows are in accordance with the financial transactions recorded in the organization.
However, the work of accounting reconciliation goes far beyond a simple checking. Because, if there are problems, the accountant must guide the client in solving the bottlenecks, identifying the origins of each one of them for later correction.
Points to check in the process
Throughout the conciliation process, the accountant will evaluate various tax and financial documents for the organization, for example:
- Payment Statements;
- Payroll;
- Financial Reports;
- Investment Reports;
- Cash flow and loan records
- Balance sheets, among other documents.
Based on the evaluation of all records, the accounting professional and the company’s managers detect the cash inflows and outflows. In addition, accounting reconciliation enables the perception of possible posting errors.
Another interesting aspect is that this process also allows you to compare the values in documents with the balance sheet records.
Then, after completing the process, the accounting offices in Brazil present a report containing a detailed diagnosis of the company’s financial health.
Why it is important?
Accounting reconciliation is a practice that favors the financial health of your business. First, because it helps to find and prove posting errors that can generate great financial losses to your company at some point.
In addition, crimes such as fraud are often discovered from the reconciliation work. And, once fraud is characterized, it is possible to carry out investigations and punishments.
Likewise, the conciliation process aims at avoiding labor lawsuits, since payroll accounting indicates factors such as:
- Incorrect calculations in salary entries;
- Incorrect calculations in employee termination values.
For all that, this process is an essential pillar in advisory accounting, especially when the tax accountant in Brazil establishes strategies that ensure effective results.
Types of Accounting Reconciliation
Accounting Reconciliation is divided into three categories:
Payroll Reconciliation – In this process, the accountant analyzes all payroll expenses: additional salary, overtime, paid vacations, taxes, and unemployment insurance.
Bank Reconciliation – Here, the company’s account statement is evaluated, so that it is possible to understand if the inflows and outflows were posted correctly and match the final balance.
Reconciliation of Suppliers and Customers – Checking of financial transactions derived from receipts from customers and accounts paid to suppliers.
Perform accounting reconciliation with a tax accountant in Brazil
Europartner is an accounting firm in Brazil that has a very experienced team in accounting reconciliation.
Our expertise offers our clients great peace of mind, since we operate with transparency, credibility, responsibility and compliance with tax deadlines.
Therefore, if you already have a company incorporated in Brazil or intend to start your operations in the country, talk to the Europartner team!
