Preparing a Bank Reconciliation

The system maintains a transaction history of all activity against the bank checking accounts your company uses. You can view this information using the Bank Reconciliations form, and also prepare bank reconciliations by tracking what has been recorded by the bank.

The system provides automatic sources for bank reconciliation entries. These sources display in the Ref Type field:

• A/P - The transaction is posted from A/P check or draft printing.
• A/R - The transaction is posted from A/R check, adjustment, wire, or draft posting.
• PR - The transaction is posted from payroll check printing.
• BAL - The transaction is created during the bank reconciliation compression process.

Steps

To reconcile and then compress transactions:

1. To reflect deposits and miscellaneous charges that are not automatically added (see above), you must either manually add them through the grid on the Bank Reconciliations form, or record them in the General Journal or a user-defined journal.
2. When you receive a statement from the bank, for each reconciled transaction, select Reconciled on the Bank Reconciliations form.
3. To process all transactions against the current General Ledger cash account, click Balance Compute.
4. To delete transactions that have been reconciled, run the Bank Reconciliation - Compression utility:
   • (Optional) By default, the system compresses transactions through the current system date, but you can enter a different date that is earlier than the date of the last check record you want to compress. This sets the system to know what check number is next in the sequence.
   • In the Bank Code field, select the bank code of the bank account you want to compress.
   • If you want the system to automatically increment date ranges and re-run reports and utilities, select the Increment Date check box.
   • To compress the selected bank code's reconciliation transactions, select Process.

How VAT is Handled During Reconciliations

For A/R transactions, after a payment by check is received for an invoice, you must manually enter the payment in the Bank Reconcilations form. You must enter and post customer checks individually. When each payment is reconciled with the bank statement, the system credits the VAT A/R Received account.

For A/P transactions, after a processed check is reconciled with the bank, the system debits the VAT A/P Paid account.

Related Topics

General Ledger Steps