Assistance with reconciling P&L differences through an effective BAU tool and industry expertise
Between the client’s finance and management accounts, there was a €22m Profit and Loss difference. New Link came in to create a BAU tool to help reconcile this difference.
Problem Statement:
New Link Consulting engaged with the client (a Tier 1 Investment Bank) to assist with reconciling the Profit and Loss (P&L) differences between their management accounts and financial accounts. For London Rates, P&L in management accounts should be able to be reconcilced to the P&L in the financial accounts. In September 2010, there was no BAU tool to be able to reconcile a €22m difference.
For the project to succeed, the client required that:
- The breaks that made up the difference were analysed thoroughly,
- That New Linked offered recommendations for how they should be cleared,
- Control issues needed to be identified and effeiciently remediated and;
- A BAU tool required developing to enable full reconciliation at a contract level,
NLC Engagement:
New Link were able to assist the client by offering an experienced accountant that had substantial knowledge of middle office procedures, particularly in exchange traded and Over the Counter (OTC) futures and options.
New Link’s responsibilities extended to proactively seeking out key subject matter experts and other contacts to provide necessary data. New Link were a primary driver in investigation methodology for the project.
Outcome:
New Link achieved a number of results, such as a built-out Year to Date (YTD) P&L reconciliation process at a more granular level that was centred around movements in the balance sheet.
Through thorough analysis, key control issues were identified and worked on through a formal handover to the line.
A robust BAU reconciliation tool was successfully implemented due to a deep knowledge of the wider industry.
Because of this successful implementation of the BAU tool, risk identification and reconciliation methodologies, New Link was able to form healthy relationships with key individuals in Eclipse and other similar networks.
