Overview
Help Document R-769 Bank Accounts-Reconciling and Correcting Errors
Each defined bank account should be reconciled when the bank statement is received. The first reconciliation uses the starting balances for each owner and the net of uncleared transactions to reconcile the bank statement from the day prior to the starting date.
First Time Bank Reconciliation
1.
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Go to <<GL, Reconcile Bank Account>>
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2.
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Select the [Bank] account from the drop down list
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3.
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The [Opening Balance] will be zero - leave it that way
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4.
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Type in the [Closing Balance] from your bank statement
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5.
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Change the [Closing Date] if different from the default.
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6.
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Mark each owner balance line item as cleared by clicking in the [Clear] checkbox. You could also use the <Mark All> button to mark all line items clear at one time.
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7.
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Note the dollar amount in the [Difference] field - If there is a difference click on the adjust bank account speedbutton.
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8.
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The adjustment you will post is made up of any management money in the bank account, and any uncleared checks and uncleared deposits that are part of the owner’s beginning balances.
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9.
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Change the [Date] to the bank statement closing date.
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10.
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Select the [Bank] account from the drop down list
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11.
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Select the Management Group for the [Ledger].
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12.
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Click the <Increase> radio button if the [Difference] is negative and the <Decrease> button if the [Difference] is positive.
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13.
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Select Retained Earnings for the [Account].
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14.
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Type in the difference [Amount]
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16.
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Click on the Other Additions (or Other Subtractions) tab and mark the line item. This will make the [Difference] zero.
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18.
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Click <Yes> to print the report
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19.
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Click <Yes> to record the reconciliation
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Determine the checks and deposits that were uncleared as of the date of your first bank statement reconciliation (from your old program). These were part of the beginning balances entered for owners.
Enter each uncleared check as a handwritten check using the Management Group as the [Bill to].
1.
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Go to <<AP, Single Check>>
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2.
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Change the [Date] to the date of the check
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3.
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Select the vendor from the [Payee] drop down list
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4.
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Select the [Bank] account
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5.
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Mark the [Handwritten] checkbox
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6.
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Type in the [Check Number]
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7.
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Select the Management Group as the [Bill To]
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8.
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Select the [Bill Code] from the drop down list
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9.
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Type in the dollar amount of the check
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10.
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Click <New> to enter more checks
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Enter each uncleared deposit as a ledger receipt to the Management Group.
1.
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Go to <<AR, Ledger Receipt>>
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2.
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Change the [Date] to the date of the deposit
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3.
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Select the Management Group for the [Ledger]
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4.
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Select the [Bank] account
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5.
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Select Retained Earnings for the [Account]
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6.
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Type in the dollar amount of the deposit
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8.
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Click the <Deposit Receipt> Speedbutton
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9.
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Change the [Date] to the date of the deposit
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10.
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Select the [Bank] account
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11.
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Enter the [deposit amount]
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13.
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Click <Yes> to print the report
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14.
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Click <Yes> to post the deposit
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15.
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Enter the next deposit
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Example
At the end of the month:
Checkbook $94,000 Owner's balances $90,000
Bank Statement $100,000 Management balance $4,000
At the end of the month your checkbook shows $94,000. $90,000 of that is owner money, entered as beginning balances for the owners. $4,000 is the management group balance which has not been entered in PROMAS.
To initialize the bank account you do a bank reconciliation. The bank statement shows an ending balance of $100,000 because there are $6,000 worth of uncleared checks.
After marking off all of the owner beginning balance transactions, the reconciliation will be off by $10,000. You must post a bank adjustment to the management group for that $10,000 and mark it off in the reconciliation. You have now given the management group $6,000 more than it actually has.
After posting the bank reconciliation, enter all the uncleared checks against the management group. The management group balance is now correct.
Reconcile Each Month
1.
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Go to <<GL, Bank Reconciliation
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2.
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Select the [Bank] from the drop down list
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3.
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Verify that the [Opening Balance] matches the opening balance on the statement
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4.
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Type in the closing bank statement balance in the [Closing Balance] field
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5.
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Type in the [Closing Date] from the bank statement
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6.
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Click on the Deposits tab
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7.
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Mark each deposit on the screen that matches a deposit on the bank statement by clicking in the [Clear] checkbox
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9.
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Mark each check on the screen that matches a check on the bank statement by clicking in the Clear checkbox
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10.
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If there were no other items on the bank statement (interest, service charges) the [Difference] field should be zero. If so, print the report and <Post>.
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Interest, Service Charges, Bank Errors
To record any of the above, use the <<Adjust Bank Account>> speedbutton. For interest or service charges, enter one adjustment. For a bank error enter two adjustments - an increase and a decrease. One will be cleared on this statement, the other will be cleared on the next bank statement.
1.
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Click the <<Adjust Bank Account>> speedbutton
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2.
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Change the [Date] to the bank statement closing date
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3.
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Select the Management Group for the [Ledger]
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4.
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Click the appropriate radio button. In the case of a bank error post a transaction with each one.
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5.
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Use the default [Account] code. For a bank error either use the default and modify the memo or enter an account code of Bank Error.
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6.
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Type in the difference for [Amount]
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8.
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The items to mark in reconciliation will be in either Other Additions or Other Subtractions.
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There are two How To PDF documents that may be helpful in making sure your accounts are in order: How to PDF document #703– Audit – has worksheets you can use to help you do the three-way-reconciliation. Also see How To Document #707 - 3 Way Reconcile.
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