How to process a Bank Reconciliation
This article covers how to process a bank reconciliation using the “Bank Reconciliation” feature to reconcile the bank statement and general ledger closing balances for all bank accounts each month.
Reconciling bank accounts involves clearing namely, the payments and receipts that have cleared the bank, entering adjustments to the general ledger, and printing a detailed reconciliation worksheet that compares the adjusted bank balance with the adjusted general ledger balance.
To process a bank reconciliation:
- Click on “Banking & Reconciliation”
- Click on “Reconcile Bank Accounts”
- Account - Select the bank account to reconcile
- Statement Date - Select the date of the bank statement i.e., last day of the month.
- G/L Period Date Range - Select or enter the date range i.e., from first date of the month till the last date of the month as per the Statement Date.
Note:
- The date range will auto populate the from and to dates when selecting the Statement Date.
6. G/L Closing Balance - Auto populated based on date range, including opening General Ledger balance.
Note:
- The closing General Ledger balance will include all transactions i.e., payments and receipts processed within the date range.
- Before starting the bank reconciliation, ensure that all “Payment Types” set to be deposited e.g., cheques & cash, that a deposit has been processed in the “Make Deposits” feature for that bank, for the month received, even though the physical deposit has not been done at the bank, as these receipts form part of the closing General Ledger balance. These deposits will remain as unreconciled items on the bank reconciliation when complete.
7. Bank statement Ending Balance - Enter the closing Bank Statement Balance (the balance reflected on the bank statement on the last date of the month).
8. Click on “Proceed”
9. Bank Account - General Ledger Bank Account will be displayed
10. Cheques - On the left side of the screen, the uncleared cheques/payments processed for the selected General Ledger Bank account are listed.
11. 
Reconcile cheques/payments matching to the bank statements i.e., cleared the bank, by ticking this box . 
Click again to deselect this box to unreconciled a cheque/payment.
12. Clear cheques by Amount - An option to reconcile the cheques quicker, by clicking on this feature and entering the cheque number in the “Cheque #” After entering the cheque number, and “Enter” key the cheque amount will populate in the “Amount” field. The cheque will be ticked on the left- hand side as reconciled when either clicking back into the “Cheque #” field to enter the next cheque number to reconcile or clicking on “Close”.
13. 
Click to “View Audit” or “Print Audit” for Clients/Matters the deposit/receipt was processed to 
14. Total Cheques Cleared - Total cheques cleared amount can be agreed to the total withdrawal amount on the bank statement.
15. Deposits & Other Credits - On the right-hand side, unreconciled deposits and receipts processed for the selected General Ledger Bank account are listed.
16. 
Reconcile deposits & other credits matching to the bank statements i.e., cleared the bank, by ticking this box . 
Click again to deselect and to unreconciled a cheque/payment.
17. 
Click to “View Audit” or “Print Audit” for Clients/Matters the deposit/receipt was processed to
18. Total Deposits & Other Credits Cleared - Total deposits cleared amount can be agreed to the total Deposits amount on the bank statement.
19. Adjustments – Posting Adjustments – Recurring - Recurring monthly charges or transactions e.g., bank charges and insurance etc. These can either be posted as “Write General Cheques” to show with the other Cheques/Payments on the left-hand side of the screen or entered here as adjustments to post as journal entries updating the specified General Ledger account. “Save & Close” after adding recurring adjustment.
20. Adjustments – Posting Adjustments – New - Additional charges for the month i.e., once off Non- Taxable charge. These can either be posted as “Write General Cheques” to show with the other Cheques/Payments on the left-hand side of the screen or entered here as adjustments to post as journal entries updating the specified General Ledger account.
Note:
- These adjustments can only post to the General Ledger accounts once the bank reconciliation “Difference” = $0.00.
- Only Non-Taxable adjustments can be entered here. Taxable adjustments can be entered by using the “Write General Cheques”.
To post both “Recurring” and “New” adjustments, click on “Post Adjustments”.
21. Worksheet Adjustments – G/L - These are temporary adjustments which should be cleared or deleted within one or two months. These adjustments do not update the General Ledger accounts but adjust the General Ledger closing balance.
Note:
- The “G/L Adjustments” amount in the formula is a sum of the “Posting Adjustments (Recurring & New) + Worksheet Adjustments – G/L = G/L Adjustments amount”.
22. Worksheet Adjustments – Bank - These are temporary adjustments which should be cleared or deleted within one or two months i.e., Bank Errors etc.
23. Enter NSF (Non-Sufficient Funds) - Returned deposits/receipts due to insufficient funds can be process here (refer to article “How to process an NSF”).
24. Refresh - Select “Refresh” to include additional transactions processed whilst reconciling the bank.
25. Print - Select “Print” to view and print all the reports i.e., Outstanding cheques, Outstanding deposits and any worksheet adjustments.
Note:
- Each section is generated as a separate report. At month end it is advised to save these reports in a “Finance” folder for ease of reference.
26. Save & Close - Click on “Save & Close” to complete the monthly bank reconciliation if the “Difference” is zero, to save to continue with the same month reconciliation at another time.
Additional Notes:
- The Opening balance as per G/L should be equal to the closing balance of the last month as per G/L on the printed worksheet.
- Journal entries that have been posted to the general ledger will not display in the bank reconciliation window but will affect the balance. Take these into consideration when considering your total balances for cleared cheques etc.
- The worksheet adjustments should not be carried forward for a longer period as those are the discrepancies which should be cleared.
- Deposits should be finalized on the correct dates, in line with the receipt date or within the same month as the receipt was posted
- Whilst clearing the cheques, ensure the cheque number and the amounts are correct.
- If the same cheque number has been used in error, when clearing the cheque using the “Clear Cheques by Amounts” ALL cheques with the same cheque number will be cleared.
- In the case of a cheque or deposit being reversed ensure that you clear both the original transaction and the reversal together to balance your reconciliation
- To reopening the previous month bank reconciliation, un-reconcile ALL bank items on the current bank reconciliation before reopening the previous month bank reconciliation.
Tips:
- Unable to find a cheque on the bank reconciliation - Run the “Cheque Register” report until the to date in detail to find if the cheque has been cleared from the bank reconciliation.
- To identify the amount of deposit from the cumulative deposit and the date of make deposit, run the “Deposit & Receipt Detail” report to find the deposit amount or the audit number.
