Accounts Health Check Process

The Accounts Health Check is designed to ensure the accuracy and integrity of financial data within the DMS (Dealer Management System). This process helps finance teams identify, classify, and address discrepancies before they lead to larger reporting or operational issues.

By conducting a routine health check, businesses can:

• Detect and resolve accounting errors early.

• Maintain compliance with internal audit procedures.

• Ensure consistent and clean data in preparation for VAT submissions, monthly reporting, or year-end accounts.

This guide outlines how to carry out a systematic review using the Health Check Report and provides detailed guidance for each key review area.

Accessing the Health Check Report

To begin the review, download a blank copy of the Health Check Report below.

Understanding the Report Structure

Each review item in the report includes:

• Observations: A free-text space to record what is found during review.

• Level: A traffic light system to highlight severity:

• Green - No issues detected
• Amber - Requires review but is not critical
• Red - Requires urgent attention

Key Review Areas and Procedures

1. Review Reconcile Report

Go to Nominal Ledger > Reconcile Report and run the report using today’s date.

Purpose:
This report helps you identify any imbalances between ledger accounts, which may indicate data entry errors, missing journals, or incomplete processes that require attention.

Steps:

1. Run the report to display all current reconciliations.

2. Check for any imbalances showing against individual ledgers.

3. Drill down into each ledger heading to review the underlying transactions.

4. Pay close attention to any matching debit and credit entries that may offset each other but have not been properly reconciled.

5. Record the number and nature of affected items for tracking.

Support:
For further details on typical causes of imbalances and troubleshooting steps, refer to the Helpdesk article:

Reconcile Imbalances

Findings Classification:

• Green – All ledgers are in balance, no action required.

• Amber – Minor discrepancies (less than £200) or imbalances that have existed for less than 1 month.

• Red – Significant discrepancies (over £200) or issues persisting for more than 1 month, requiring urgent investigation.

2. Reconcile VAT Control Codes

Purpose:
This check ensures that VAT-related nominal accounts accurately reflect the figures reported in the VAT Return. Discrepancies could signal posting errors, incorrect VAT treatments, or timing issues that may affect VAT submissions.

Steps:

1. Review the following nominal codes:

   • 0.0.70.3 – VAT Outputs

   • 0.0.60.4 – VAT Inputs

2. Confirm that the balances in these codes align with the corresponding values in the VAT Return Report.

3. Check the Held Deposit Control code (0.0.70.91) to ensure it balances between the Nominal Ledger and the VAT Report.

   • Note: The Deposits Report in MTD is a live report. It should always be compared against the current nominal balance, not a historic one.

Support:
If discrepancies are found, consult the Helpdesk: Helpdesk : Navigator for guidance on how to investigate and resolve them.

Findings Classification:

• Green – All VAT control codes are in agreement with the VAT Return.

• Amber – One code is out of balance.

• Red – Two or more codes are out of balance, indicating deeper issues requiring immediate attention.

3. Reconcile Bank Back to Nominal

Purpose:
This step ensures that the bank account balance in the Nominal Ledger accurately reflects the actual bank balance, after factoring in unreconciled transactions. Discrepancies can indicate errors in postings, missing entries, or reconciliation delays that may impact cash reporting.

Steps:

1. Identify the relevant Bank Nominal Account(s).

2. Run the Bank Reconciliation to determine the actual bank balance, including any unreconciled items.

3. Compare the reconciled bank balance to the balance shown in the Nominal Ledger.

4. Investigate and explain any variances, especially if they persist month to month.

Support:
For guidance on how to carry out this process or troubleshoot discrepancies, refer to the Helpdesk article: Reconciling the Bank 

Findings Classification:

• Green – The reconciled bank balance matches the Nominal Ledger.

• Amber – Discrepancy exists, but is within £100.

• Red – Discrepancy exceeds £100, requiring further investigation.
  

4. Review Trial Balance for Miscoding

Purpose:
This check ensures that the Trial Balance is accurate and that nominal codes are being used consistently and correctly across the ledger. Inconsistent use of codes or miscoded entries can distort financial reporting and impair decision-making.

Steps:

1. Run the Trial Balance to confirm that it is in balance.

2. Examine the usage of Nominal Codes:

   • Ensure similar transactions are posted to the same codes across departments or branches.

   • Watch for unusual balances or account activity that may suggest errors or incorrect allocations.

3. Use the Extended Nominal Report for a more detailed view of postings, allowing you to trace potential miscoding back to their source.

4. Identify and record any anomalies or incorrect postings.

Support:
Refer to the Helpdesk guide for further assistance in interpreting the Trial Balance and resolving miscoded entries: Trial Balance Guide 

Findings Classification:

• Green – No miscoded entries detected.

• Amber – Between 1 and 5 miscoded entries found.

• Red – More than 5 miscoded entries identified, suggesting systemic issues.
  

5. Review None Zero Corrections (Nominal Account 0.0.70.98)

Purpose:
This check focuses on Nominal Account 0.0.70.98, which is typically used for non-standard or corrective journal entries. A residual balance in this account may indicate unresolved errors, incomplete postings, or manual corrections that were not fully processed.

Steps:

1. Navigate to the Nominal Ledger and review Account 0.0.70.98.

2. Check whether there is a remaining balance.

3. Investigate any balance to determine:

   • Whether it was part of a temporary correction that was never cleared.

   • If further journal entries are required to correct or offset the amount.

Support:
For more information on how to resolve balances in this account, refer to: Non Zero Corrections 

Findings Classification:

• Green – No balance remains, or the account balances to zero.

• Amber – Small residual balances are present (under £500).

• Red – Significant balance exists (over £500), indicating potential uncorrected entries requiring attention.

6. Review Pipeline Profit Report

Purpose:
This review checks whether vehicle deals have been correctly closed in the period in which they were processed. Deals left open beyond their appropriate closing period can distort profitability reporting and impact period-end accuracy.

Steps:

1. Run the Pipeline Profit Report to list all open deals.

2. Review each entry to determine whether it should have been closed in a previous period.

3. Pay close attention to:

   • Deals that appear complete but remain open.

   • Delays in processing or missing documentation preventing closure.

4. Investigate any long-standing open deals to identify underlying issues and take corrective action.

Support:
For further help with interpreting or managing open deals, refer to: Closing Deals Process 

Findings Classification:

• Green – All deals have been correctly closed within the current period.

• Amber – Some deals remain open, but they are no more than 1 month old.

• Red – Deals have been left open for more than 1 month, requiring immediate follow-up.

7. Review Profit Report

Purpose:
This review ensures that deals are being processed correctly and consistently, with a focus on preventing unnecessary invoicing/crediting and ensuring accurate profit reporting. Reopened deals can skew profitability figures and create audit concerns.

Steps:

1. Run the Profit Report for an unfiltered view over a 3-month period.

   • Ensure the Consolidated option is unticked to display individual deal details.

2. Examine whether deals have been:

   • Invoiced or credited incorrectly or more than once.

   • Reopened unnecessarily after closure.

3. Review deal processing patterns to confirm:

   • Profitability has been accurately recorded.

   • Transactions are not being manipulated to shift profits between periods.

4. Investigate any repeated opening/closing behaviour that may indicate poor user practice or system misuse.

Support:
For additional guidance on reviewing profitability and deal status, refer to: Profit Report How To 

Findings Classification:

• Green – All deals have been closed correctly and have not been reopened.

• Amber – Fewer than 10 deals have been reopened during the period.

• Red – More than 10 deals have been reopened, indicating a pattern requiring corrective action or training.

8. Review Work In Progress (WIP)

Purpose:
This review identifies irregularities in Work In Progress (WIP) that may affect profitability, stock accuracy, or month-end reporting. Jobs left open or misused can lead to misstatements in the accounts and indicate weaknesses in operational processes.

Steps:

1. Run the WIP Report.

2. Review the report for anomalies such as:

   • Old jobs that have been completed but remain open.

   • Jobs with unusually high parts values, especially in Sales jobs.

   • Jobs being used as a “dumping ground” for unresolved costs, errors, or stock shortfalls.

3. Assess whether all sales and service work is being processed and closed correctly.

4. Reconcile the total WIP value with the WIP Nominal Ledger account to ensure they are aligned.

Support:
For further help identifying and addressing WIP issues, consult: How to Reconcile WIP 

Findings Classification:

• Green – All WIP entries are current and relate to the present month.

• Amber – WIP includes entries that span up to 2 months.

• Red – WIP includes entries older than 2 months, suggesting delays or misuse that require investigation.

9. Reconcile Parts Stock Back to Nominal

Purpose:
This review ensures that the value of parts stock in the system matches the balance held in the Nominal Ledger. Any discrepancies may indicate issues such as mispostings, inaccurate stock valuations, or unrecorded write-offs, all of which can impact margin and balance sheet accuracy.

Steps:

1. Use the Manager’s Toolkit to access the current parts stock list.

2. Compare the total value against the Nominal Ledger balance for the parts stock control account.

3. To produce a historical Parts Stock List:

   • Go to the Reconcile Report.

   • Double-click on the “Parts Stock” line.

   • Select the desired date, then view, print, or export the data.

4. Review Write-Off Nominal Accounts to ensure any adjustments, obsolete stock, or shortages are being recorded accurately and regularly.

5. Confirm the frequency and accuracy of physical stock checks, and ensure any variances are posted promptly.

Support:
If assistance is needed with reconciling or interpreting stock values, refer to: Helpdesk : Navigator.

Findings Classification:

• Green – Parts stock balances exactly with the Nominal Ledger.

• Amber – Minor discrepancy within £100.

• Red – Discrepancy exceeds £100, requiring investigation and resolution.

10. Review Debtors

Purpose:
This review ensures that the Debtors Ledger is accurate, recoverable, and aligned with the Nominal Ledger. Discrepancies can lead to misstated sales figures or unrecoverable debt being carried forward.

Key Checks:

• Does the Debtors Report match the Nominal Ledger?

• Does the Aged Debtors Report also reconcile back to the Nominal?

• Are internal accounts set to Auto Clear, avoiding buildup of internal balances?

• Is there any unallocated cash that requires allocation or review?

• Assess the ageing of outstanding debt to determine whether it is still recoverable.

Reconciliation Procedure:

Step 1: Schedule the Sales Ledger Control Account

• Navigate to:
  Main Menu > Accounts > Nominal Ledger > Reports > Schedule Nominal

• Select Nominal Code 0.0.60.1 and schedule by Sales Ledger Account Number for a future date.

Step 2: Generate a Debtors List

• Go to:
  Main Menu > Accounts > Sales Ledger > Debtors

• Run the report for the same future date used in Step 1.

Step 3: Compare Reports

• Ensure totals and individual account balances match between the two reports.

• If discrepancies are found:

  • Trace the differences to specific entries.

  • Post a Nominal Journal to make corrections where appropriate.

Important Note:
When correcting balances for specific account numbers, ensure you schedule by account number, and enter both the company number and the account number (e.g. 0101123).

Findings Classification:

• Green – Debtors reports are fully reconciled and all balances are current.

• Amber – Significant levels of unallocated cash requiring attention.

• Red – Debtor balances over 3 months old or unreconciled discrepancies in the ledger.

11. Review Vehicle Debtors

Purpose:
This review ensures that vehicle-related debtor balances are accurate, fully recoverable, and appropriately recorded in the Nominal Ledger. Unreconciled or outdated balances can indicate missed income, incorrect postings, or incomplete deal closures.

Key Checks:

1. Reconciliation

   • Does the Vehicle Debtors Report balance with the Nominal Ledger?

2. Aged Balances

   • Review older debtor balances to determine if the amounts are still recoverable.

   • Investigate any balances over 1 month and take action on anything over 3 months.

3. Credit Balances

   • Investigate credit balances to ensure:

     • The underlying deals have been properly completed.

     • No add-ons (e.g. warranties or accessories) have been missed.

4. Deposits

   • Confirm that all deposits listed relate to live deals.

   • Duplicate or stale deposits may indicate incorrect customer handling or delays in deal closure.

5. Finance Commissions

   • Review how finance commission income is posted:

     • Is it being posted directly to nominal accounts or first through a Sales Ledger account?

6. Transaction Clarity

   • Check for any items listed without descriptions or customer references, as these may be incomplete or wrongly posted.

Support:
See How to Check Vehicle Debtors for step-by-step guidance on resolving vehicle debtor discrepancies.

Findings Classification:

• Green – Balances are current, reconciled, and properly documented.

• Amber – Outstanding values over 1 month old or minor inconsistencies requiring review.

• Red – Does not reconcile with the Nominal Ledger and/or contains balances over 3 months old.

12. Review GANI (Goods Awaiting Nominal Integration)

Purpose:
The GANI (Goods Awaiting Nominal Integration) report identifies transactions—typically vehicle purchases, stock additions, or cost postings—that have yet to be fully integrated into the Nominal Ledger. Regular review ensures accurate cost recognition and prevents backlog in financial reporting.

Steps:

1. Run the GANI Report:

   • Go to the GANI report menu.

   • Enter a relevant date range.

   • Tick the “Detailed Report” option for a breakdown of individual entries.

2. Review the Report:

   • Examine how far back the entries go.

   • Identify whether transactions are:

     • Awaiting processing.

     • Incorrectly posted or duplicated.

     • Held up due to missing vehicle records or system configuration issues.

3. Take Action:

   • Investigate the cause of any aged items.

   • Clear or process outstanding entries as required to keep the ledger current.

Support:
For assistance in clearing aged GANI entries or correcting processing issues, refer to: Writing Off GANI 

Findings Classification:

• Green – All items have been cleared or processed within 1 month.

• Amber – Some items are over 1 month old and require review.

• Red – Items over 2 months old remain unprocessed, indicating delays or systemic issues.

13. Review Creditors

Purpose:
This review ensures that creditor balances are accurate, current, and correctly recorded in the Nominal Ledger. Discrepancies, ageing balances, or unallocated cash can result in overstated liabilities or payment delays.

Key Checks:

1. Reconciliation

   • Confirm that the Creditors Report matches the balance in the Nominal Ledger.

   • Verify that the Aged Creditors Report also reconciles correctly.

2. Aged Balances

   • Review the age profile of outstanding creditor balances.

   • Investigate any items over 3 months old to determine if they are valid, duplicated, or require write-off or correction.

3. Unallocated Cash

   • Check for unallocated supplier payments or unmatched credits.

   • Ensure these are kept to a minimum and investigate unresolved amounts promptly.

Findings Classification:

• Green – All balances are up to date and reconciled with the Nominal Ledger.

• Amber – Large values of unallocated cash require follow-up.

• Red – Outstanding balances over 3 months old, or failure to reconcile with nominal, indicating issues that need urgent attention.

Spare Working Sheet

Use the final section of the Health Check Report for:

• Additional notes

• Manual adjustments

• Tracking items under review

Final Notes

• Conduct this Health Check monthly, or prior to quarterly/year-end reviews.

• Use the traffic light system to prioritise follow-ups.

• For issues needing support, raise tickets via the DMS Navigator Helpdesk with documented findings.

If you require further help interpreting results or resolving imbalances, please contact DMS Navigator Support.