Reconcile Bank Account |
Overview - an overview of the reconciliation process Procedure - an explanation of the steps in the reconciliation process Fields - an explanation of the fields on the left of the screen Protected Fields - an explanation of the fields on the right of the screen Folder Tabs - an explanation of the folder tabs at the bottom of the screen
Help Document R-769 Bank Accounts-Reconciling and Correcting Errors
Each bank account consists of the transactions (deposits, withdrawals) posted to that account. Each transaction is either in a cleared or uncleared status. The cleared transactions are the ones your bank has processed while the uncleared are the ones you have processed but the bank hasn’t yet. The current balance in your account is the net of all transactions you have processed since the bank account was opened. The bank statement balance reflects the net of all the transactions that the bank has processed. This differs from your balance on that same day because there will be checks you have written that the bank hasn’t processed yet. The reconciliation process is to verify that the bank does the same things that you do and in the exact amount.
If you don’t reconcile, your bank account balance may not be correct. To insure the accuracy of your records, you should reconcile the system bank account balance each time you get a bank statement. If you have several months of statements to reconcile, always start with the oldest one. All reconciliations follow the same basic steps, therefore the information in this section applies to all bank account reconciliations.
You can, while in the process of reconciling, quit and cancel even though you haven’t completed the entire process. When you come back, all transactions marked for clearing will remain so.
Each transaction has a Clear checkbox. For uncleared transactions the checkbox is blank
Choose the bank account from the Find List, then enter the Closing Balance and Closing Date from the bank statement. The Opening Balance should equal the opening balance on the bank statement. All uncleared transactions through the Closing Date will display as line items.
The closing date is used to store the date that a transaction was cleared and can be used by the system to reconstruct any bank reconciliation at any time in the future. This should always be the same as the statement closing date.
The bank statement reconciliation exercise involves matching deposits and payments shown on the bank statement with those displayed. The process involves marking (clearing) each transaction on the screen that corresponds to one on the bank statement. There should be a one-to-one match. As each payment or deposit is marked (cleared), the amounts in the protected fields are updated and the Difference is adjusted.
Any transactions showing on the bank statement that are not displayed must be entered prior to completing the reconciliation. Any uncleared transactions with no chance of ever appearing on a bank statement should be handled outside this bank statement reconciliation. Transactions that do not belong If there are transactions that do not belong on the reconciliation, there are two choices:
When all transactions shown on the bank statement are marked, the Difference between the Cleared Balance and the Closing Balance must be zero. If it is not zero, you either:
The protected fields are designed to help you research where the discrepancy has occurred.
When the difference is zero you should print the report and post the reconciliation. The report will include both cleared and uncleared transactions.
After finishing the reconciliation, review the uncleared transactions. For each one ask yourself the question "Will this transaction show up on a future bank statement?" If your answer is No then you must take whatever corrective action is necessary to change that transaction to a cleared status.
If there are any uncleared deposits prior to the Reconcile Through date, edit and examine the line items in either Bank History or Reconcile Bank Account. Bank Account Choose the bank account from the Find List. Closing Balance Enter the closing balance amount from the bank statement. Closing Date This date field defaults to the last day of the previous month. Enter the closing date from the bank statement if different from the default. This date is appended to each line item marked for clearing when the reconciliation is posted, thus making it possible to review a reconciliation at some future time. After entering this field the line items will display. Extra Days This lets you display transactions posted after the closing date that may appear on the bank statement - like a deposit put in the bank on the last day of a month but not posted until the next day. Line Items Each line item contains the date posted, check number, description (payee for checks), amount and a Clear check box. Amounts that decrease the bank account balance are displayed in parentheses ( ). Clear Check Box Clicking on this box will toggle the clear box between marked for clearing Mark Range This button lets you mark a range of check numbers. It may be faster to mark a whole range and then unmark those that are not on the bank statement. Start Over This button will unmark all line items currently marked for clearing.
Reconciliation Protected Fields On the right portion of the reconciliation screen there are four sets of protected fields to assist in completing the reconciliation. Each set is separated by a gap between the boxes.
The top set has the Opening Balance amount, which, when added to the Amount Cleared (sum of all line items marked for clearing ) constitutes the Cleared Balance. The net of the Cleared Balance and the Closing Balance (from the bank statement) is the Difference. To post the reconcilation the difference must be zero. The Amount Cleared changes as you mark or unmark line items and when you have marked all the bank statement transaction (and only those) the difference will be zero. Opening Balance This amount represents the net of all cleared transactions (deposits, checks, charges) for the bank account that have been posted. It should match the bank statement opening balance. Amount Cleared This number reflects the net of the line items marked for clearing. Cleared Balance The net of the Opening Balance and the Amount Cleared. Closing Balance The amount you entered from the bank statement. DIFFERENCE The net of the Closing Balance and the Cleared Balance. This field must equal zero in order to post.
The next set of protected fields tracks the checks and other subtractions marked for clearing. The sum of Checks, ACH and Other equals the Subtractions. Depending on how your bank statement is prepared, these numbers may be summarized. If they are, they can be used to identiry the difference in the check amounts marked for clearing and those on the bank statement.
The third set tracks the Deposits and Other additions marked for clearing. The sum of the two is the Additions amount.
The bottom set has three protected fields. Uncleared The net of all uncleared transactions - both those through the reconciliation date and all others after that date. Awaiting Deposit The sum of all receipts that have not been posted in the Deposit Receipts function. Current Balance This is your current bank account balance based on all transactions posted to date. This number reflects the sum of the Cleared Balance, Uncleared, and Awaiting Deposit which represents the current available balance in this bank account.
A portion of the line items meeting the selection criteria of the reconciliation can be viewed by using the folder tabs. All Includes all transactions through the closing date which have not yet been cleared. Cleared Displays those transactions that have been marked for clearing. Uncleared Displays those transactions that have not been marked for clearing. Stale Displays those transactions dated more than 60 days prior to the closing date. These may be candidates for purging. Deposits Lists only deposit transactions. Other Additions Lists only additions to the bank account other than deposits. Included are items such as interest earned, bank transfers, positive bank adjustments. Interest earned on a bank account can be entered as a Journal Voucher or through the Adjust Bank Account function. Checks Displays only check transactions. ACH Lists only those transactions done by ACH through <<AP, Scheduled Payables, ACH Distribution Batch>> or through AP, Single Check with the ACH checkbox marked. Other Subtractions Lists only subtractions from the bank account other than checks, such as bank charges, bank transfers. Subtractions from the account can be entered through the GL, Adjust Bank Account function. By Amount Lists all transactions in sequence by highest negative to highest positive. |
. For transactions marked for clearing but not yet posted, the checlbox is marked 
.