Bank Reconciliation

What does bank reconciliation mean and how do I do it?

Bank reconciliation is a process whereby transactions in your cashbook are matched with transactions appearing on bank statements. This is a basic procedure which should be followed in order to ensure the accuracy of the information entered into Cashbook. It is recommended that reconciliations be performed at least monthly or more often if required.

To reconcile a bank account follow the instructions below the following screen shot.

• Click on the Reconcile toolbar icon.

• Select Bank To Reconcile from the drop-down list.

• Enter the date that you wish to Reconcile up to. Note that this date will default to the end of the month (or other period as set in the Chart of Accounts for that bank account) following the date of the last completed reconciliation for the selected bank.
• Receipts and payments that have not yet been reconciled up to the entered date will display in the list box to the right of the screen.

• Enter the ending balance shown on your bank account statement in the Bank Statement Balance field. Note: an overdrawn balance is entered as a negative figure (using the minus sign on the keyboard).
• You can change the Sort List By order of the transaction list from the drop-down list. eg. sort list by Date, Reference, Amount or Description.
• You can also restrict the Display list to just Payments, or just Receipts or Both, by ticking the appropriate checkboxes.
• Now click in the transaction listing window and "tick" the transactions off against your bank statements - be careful to ensure that the amounts match precisely. To "tick" a transaction on the screen, simply right-click the mouse. You can use scroll bars or the up and down arrow keys to move up and down the transaction list.
• Note: You should normally work from the bank statment to the screen, ticking off each item on the statement in order.

• The "Reconciled Balance" shown at the bottom-left of the screen should match the running balance on the bank statement and you can check this periodically during the reconciliation.
• Once all items on the bank statement have been accounted for, the entered Bank Statement Balance should equal the calculated Reconciled Balance. The Reconciled Balance field should be blank (yellow highlight) and there will be no Difference.

• Full transaction Add, Edit and Delete functions are available via the buttons on the bottom of the screen. This enables editing of the transaction list "on the fly". (Note that double-clicking a transaction is equivalent to clicking the edit button for the highlighted transaction.)

• You can also click the Find button to search for a particular transaction by date, reference or amount - e.g. to search for amounts = $200.00, make sure the Sort Order is set to Amount and then click Find. Now type in 200 and click First. To find subsequent amounts for $200.00, just click the Find button and click Next.

• The Print button provides a means of printing the reconciliation at any time.

• You can leave a partly completed reconciliation and return to it at any time - just click the Cancel/Exit button. All previously "ticked" items will retain their "ticked" status and all that will be required next time you enter the reconciliation screen, is the re-entry of the Reconcile up to date and Bank Statement Balance figure.

Note that buttons are provided to clear all or unclear all items in the transaction list.

Note 1. A reconciliation date must be greater than the previous reconciliation date. If you record a reconciliation for the last day of the financial year, you will receive a prompt to confirm that this will be the last reconciliation for the current financial year.

Note 2. A reconciliation can be deleted and re-done at any time. Just click on the Transactions > Previous Reconciliations menu option, select the required reconciliation and click on the Delete button and then OK to confirm.