A sweep account is a general ledger account used to temporarily store financial information that will be offset by another transaction, such as when one company pays the expenses of another company but will be reimbursed by the other company. Sometimes the offset will happen in the same accounting period, leaving a balance of zero remaining in the sweep account and at other times the sweep account may have a balance remaining at accounting month-end close. Reconciling a sweep account can involve a significant amount of time depending on how many transactions run through the account monthly.
Things You Will Need
Printout of sweep account activity
Calculate what balance, if any, the sweep account should reflect. For example, if expenses paid on behalf of another company are recorded in the sweep account, but you have not received the reimbursement, then the balance should reflect the non-reimbursed items.
Compare the remaining balance in the sweep account to the amount that should be reflected in the sweep account to determine the amount the account is out of balance.
Print a copy of the sweep general ledger account, showing every transaction for the accounting period.
Using a highlighter, mark transactions that are offset in the general ledger. For example, if the general ledger shows an expense for $20 and a reimbursement for $20 for that specific expense, then highlight both of those amounts on the print-out. When you are finished, any transactions that are not highlighted and are not transactions in your list awaiting offset are the transactions causing the out of balance condition.
Research each of the transactions to see why the transaction is causing an out of balance condition and then make the necessary corrections. For example, if an expense was recorded to the sweep account but a bill to the other company was never generated, then generate the bill so that the other company can process the reimbursement.
If you are not certain how to reconcile sweep accounts, consider hiring an accounting professional to assist you with the task.