Bank reconciliations are used to manage cash flow reconciliations. They are used to compare the transactions recorded in the system to the actual bank transactions to ensure everything is properly accounted for. Bank reconciliations should be performed at month end as a minimum.
Bank reconciliation items can be automatically cleared using the Bank Statement Import prior to beginning the Bank Reconciliation.
Bank reconciliations can be recorded more than once for a specific date to allow for adjustments or corrections.
- Click the Bank Reconciliations link from the Main Menu.
- Click Add button.
- Enter the necessary information:
- Bank - Bank account to reconcile.
- Description - Name for the bank reconciliation.
- Expand the Details section.
- Enter the necessary information:
- Bank Date - Date for the reconciliation.
- Bank Balance - Bank account balance as of the date entered into the Bank Date field.
- Book Date - Date for the reconciliation. Usually the same as the Bank Date field.
- Click the Save button. The information saves, and the screen updates to Edit Bank Reconciliations.
- Select the Tools button at the top of the screen.
- Select Calculate. The bank side of the reconciliation updates the value for the below fields in the Details section. The Difference field in the top section of the screen displays the difference between the book side and bank side.
- Outstanding Checks - All Supplier Payments that are not marked as cleared.
- Deposits In Transit - All Cash Book deposits that are not marked as cleared.
- Other Outstanding Transactions - All other Cash Book transactions that are not marked as cleared.
You can now begin reviewing the transactions within each field (Outstanding Checks, Deposits In Transit and Other Outstanding Transactions) and clearing the transactions that cleared the bank. To review the transactions:
Review Outstanding Checks:
- Click the View Details link next to the Outstanding Checks field.
- Check the Cleared check box for all checks or EFTS cleared in the month. Leave the Cleared check box unchecked for any checks paid towards the end of the month that are not cleared.
- Verify, and if needed update, the date in the Cleared/Voided On field. You should set this date to on or before the bank reconciliation date.
- Click the Save button.
- Close the Payment Reconciliation screen to return to the Edit Bank Reconciliations screen.
- Click Tools and then Calculate to update the Outstanding Checks value.
Review Deposits in Transit:
- Click the View Details link next to the Deposits In Transit field.
- Check the Cleared check box for all cash book deposits cleared in the month. Leave the Cleared check box unchecked for any deposits created towards the end of the month that are not cleared.
- Verify, and if needed update, the date in the Cleared/Voided On field. You should set this date to on or before the bank reconciliation date.
- Click the Save button.
- Close the Cash Transaction Reconciliation screen to return to the Edit Bank Reconciliations screen.
- Click Tools and then Calculate to update the Deposits In Transit value.
Review Other Outstanding Transactions:
- Click the View Details link next to the Other Outstanding Transaction field.
- Check the Cleared check box for all cash book transactions cleared in the month.
- Verify, and if needed update, the date in the Cleared/Voided On field. You should set this date to on or before the bank reconciliation date.
- Click the Save button.
- Close the Cash Transaction Reconciliation screen to return to the Edit Bank Reconciliations screen.
- Click Tools and then Calculate to update the Other Outstanding Transaction value.
Once the Difference (calculated between the adjusted bank and book balances) is zero, the bank reconciliation can be completed.
- Click Tools at the top of the Edit Bank Reconciliations screen and then Complete.
Adjustments
Adjustments are used to add entries that balance the bank side or book side when a reconciling item is required to account for something that is not accounted for on the bank side or the book side. These are normally items that are under investigation or are processed with timing issues.
Create a bank adjustment when the book side (GL side) contains an entry that that the bank side does not. After the bank reconciliation is completed, this creates a cash book transaction but does not create a GL entry for the book side. To create a bank adjustment, select the Adjustments tab and click the Add Bank Adjustment button.
Create a book adjustment when the book side (GL side) needs a transaction to account for something that is missing. After the bank reconciliation is completed, this creates a cash book transaction and the GL entry to the account. To create a book adjustment, select the Adjustments tab and click the arrow next to the Bank Adjustment button. Select Add Book Adjustment.
After an adjustment has been added, re-calculate the bank reconciliation (click Tools, then Calculate on the Edit Bank Reconciliations screen) to see the value appear in the Bank Adjustment or Book Adjustment field. When the original item is resolved, it can be cleared from Other Outstanding Transactions to remove from the calculations.
Notes can be added to the bank reconciliation to provide additional details for adjustments.
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