General Ledger - Bank Reconciliation

Overview

Pgm: BANKRECFM - Bank Reconciliation; standard Treeview path: General Ledger > Utilities > Bank Reconciliation

Checks and receipts can be manually reconciled in AP and AR, but the full bank reconciliation process must be performed in the Bank Reconciliation screen.

The purpose of reconciliation is to account for differences between the actual bank balance and the balance recorded in the accounting system. This is done by reviewing outstanding checks, deposits, and transfers to determine which were not deposited, and by entering adjusting transactions to make the book cash account balance equal to the bank balance. AP and AR clerks can manually mark checks and receipts as reconciled within the AP and AR modules, or alternatively, bank reconciliation can be performed by a GL administrator using the import function in the Bank Reconciliation screen.

For more information, please refer to General Ledger - Performing Bank Reconciliation.

Bank Account

If adding a new statement, select the bank, the account number, and enter the statement date and a description.

Bank Code

Enter/select the bank code.

Account Number, Currency

Enter/select the bank account number. The Currency field is read-only and displays the currency associated with the bank. Bank accounts are maintained in the Bank Account Maintenance screen in the System Data module (standard Treeview path: System > Global Tables > Banking > Bank Account).

Closed – Checkbox

This field is read-only and displays whether the Bank Reconciliation record is closed. Press the [Open/Close] button to open/close the Bank Reconciliation record.

Enter Statement Date, Statement Description

Enter/select the statement date and description. The statement date comes from the statement that has been received or printed and is being used to perform the reconciliation.

[Import] – Button

Press this button to import a bank reconciliation file. For more information, please refer to Importing Bank Reconciliation Files.

[Print] – Button

Press this button to print the Reconciliation report. There are also two reports available to show reconciled and unreconciled checks and deposits, in the Reports submenu of AR and AP. For more information, please refer to Reports – Bank Reconciliation.

[Open/Close] – Button

Press this button to open/close the Bank Reconciliation record. The 'Closed' checkbox will be updated to display the status of the record.

[Display Data] – Button

Once the record is saved, verify/enter the statement balance in the Bank section and press [Display Data]. This will populate the figures for outstanding checks.

Bank

Statement Balance

Enter the statement balance. The statement balance comes from the statement that has been received or printed and is being used to perform the reconciliation.

Outstanding AR Deposits, Outstanding AP Checks, Outstanding PY Checks

These fields are used to display outstanding amounts resulting from unreconciled deposits/checks.

Example of Reconciliation pop-up window

The AR, AP, and PY Reconciliation pop-up windows can be launched through the [Details] buttons to reconcile the deposits/checks.

Select the checks to reconcile. They will be reconciled as of the statement date. Press [Save&Close] to apply changes.

For more information, please refer to General Ledger - Performing Bank Reconciliation.

Miscellaneous Adjustments

Enter miscellaneous adjustments that will not be posted as transactions (e.g. bank errors) through the Miscellaneous Adjustments pop-up window.

For more information, please refer to Miscellaneous Adjustments.

Adjusted Bank Balance

This field is read-only and displays the adjusted bank balance, calculated as:

Book

Adjusting transactions are entered for miscellaneous GL journal entries for such items as bank fees, interest income, or foreign exchange. Initiate adjusting transactions through the [Details] button, next to the Unposted Adjustments field.

Cash Account Balance

This field is read-only and displays the current closing balance of the cash account.

Unposted Adjustments

The Unposted Adjustments field’s [Details] button opens the Enter Transactions pop-up window, which allows the entry of GL transactions. Once the transactions are saved, their batch must be posted using the Enter Transactions screen (Enterprise standard Treeview path: General Ledger > Transactions > Enter Transactions).

It is only possible to link to one batch of adjusting transactions. Thus, it is preferable that the adjustment batch only be posted after the reconciliation process is complete. If the adjustment batch is posted before the reconciliation process has been completed, and it turns out that additional adjustments are required, then the adjustments can be entered through the Enter Transactions screen. The batch will not be linked to the bank rec, but it will have the desired effect of making the required adjustments.

It is not possible to unlink an adjustment batch number, except by deleting a Bank Reconciliation record. Fortunately, deleting a Bank Reconciliation record does not reverse any of the work that was done (e.g., marking checks as reconciled or unreconciled).

Adjusted Book Balance

This field is read-only and displays the displays the adjusted book balance, calculated as:

Prior Period Adj Variance

In bank accounts that have large numbers of transactions, there might often be a small unaccounted variance between the book and bank balance. The Miscellaneous Adjustments pop-up window is intended to record specific adjustments, their amounts and the reason. If no reason can be discovered for the variance, note the variance in the Prior Period Adj Variance field and it will be carried forward into each bank reconciliation until it can be addressed. As it usually happens, there will continue to be unaccounted variances, and over time they may cancel out. This field does not create a journal entry and it is not calculated.

When entering a value into the Prior Period Adj Variance field, it will carry forward to future bank reconciliations. When a bank reconciliation is finished and it’s ready to be closed, enter a value in the Prior Period Adj Variance field. Click [Display Data] – if the prior bank reconciliation value is 0, it will wipe out the amount that was entered.

The [Open/Close] button can be used to freeze the Bank Reconciliation record at any time.

For more information on this field, please refer to Miscellaneous Adjustments.