Popular use cases include:
- In-transit policies (e.g., money received before a policy has been written)
- Disputed claims (e.g., legal issues)
- Any other money held due to legal issues or timing of day-to-day operations
These accounts often make up a company’s largest liability aside from reserves. A typical insurance company could have hundreds of suspense accounts (20–25 percent of their total balance sheet accounts) that hold thousands of items. Due to the high-risk nature of a suspense account (high-volume transactions, nature of account and age of items), considerable resources are dedicated to performing these reconciliations. As a required SOX control, these accounts must be analyzed by type of product, aging category and business justification in order to understand what is still in the account and properly provide data for frequent audits (every quarter by either internal or external auditors).
BlackLine’s Account Reconciliations module comes with a suspense template, which provides a means for automating and controlling the reconciliation and reporting of a suspense account from a predefined source. Users can import item count, aging and business justification details on a periodic basis. Certain key fields, such as item count and aging, can be locked, requiring the preparer to work with the required items their ERP system provides at month-end. This reduces the amount of monitoring required on such a large portion of the balance sheet.
In addition, the business justification section has its own unidentified amount calculation, which is based on the difference between a) the items in the more than 90 days aging categories from the ERP and b) the items that have been justified. Companies can determine their own categories for aging and business justifications, and reports identify high-risk items across multiple suspense accounts at one time.