Bank reconciliation
The easiest way of reconciling a bank is to reconcile a whole month at a time. At a month end, you must balance the client bank to the client ledgers and the client bank control. It's essential when doing a bank reconciliation that you follow a structed procedure and the correct documentation is kept to confirm the bank was reconciled at any given time.
Complete a bank reconciliation
Click Control and then click Bank Reconciliation.
Fill in the following fields:
Bank Type | Description |
Bank Type | A bank type you want to reconcile:
|
Bank | Once you select a bank type, the bank dropdown displays a list of all bank accounts of that type held by the firm. Select the relevant account to reconcile to your statement. |
Sheet No. | By default, after you select a bank account, this field fills in with the next statement number due for reconciliation. |
Sheet Date | The actual date of the bank statement. |
Closing Balance | The closing balance as it's on the actual bank statement. This figure shows in the bank reconciliation screen and is used to calculate the total amount remaining to be reconciled for this statement. |
3. Click OK.
📌Note: The reconciliation screen appears.
4. If you're reconciling an office bank, additional fields show for charges and interest. These enable you to post any bank charges payable and interest credited on the bank statement whilst you're performing the reconciliation:
Charges - This field is a debt entry, enter the amount of any bank charges, the date, and in the account field, enter the correct nominal account to post the charges.
Post - This posts the item to the selected nominal and includes it in the display of entries, marking it as reconciled. Chits still require completing for file records.
Interest - This field is a credit entry for any interest received from the bank.
Enter the details as for charges and then click Post.
5. Using the bank statement, click the box to the left to mark off the transactions that also appear on the reconciliation screen.
🤓Tip: The sheet number is automatically entered into the sheet column, and the line colour changes to a pale yellow.
📌Note: The balances change and the status on the far right changes from unreconciled to reconciled. You can also mark an entry by selecting a status from the dropdown that appears when you click the status field. See the status options available:
Status Description
U Unreconciled
R Reconciled
X Reconciled as revered
C Cancelled
Tips on bank reconciliation
Don't reconcile a bank statement until the To Reconcile amount is zero.
Banks shouldn't post bank charges to a client's bank account. If they do, request a correction and treat this as a bank error.
Banks shouldn't post interest to a general client bank account. If they do, request this to be reversed and posted to the office bank account instead and treat this as a bank error.
If the bank has made an error on an entry then an adjustment entry can be posted using either a nominal bank error account or a client bank error ledger. Doing this allows you to reconcile the error. When the bank corrects the account, you're able to post the corresponding adjustment to the same account and again reconcile it to the statement the bank's adjustment appears on.
The error accounts are always a zero balance, unless there's been a bank error and thus can be used to remind you to chase the bank regarding any correction needed.
The client and office banks should be reconciled at a month end and if the transactions on a statement over run the month end, you should draw a line across the statement below the last entry for the month and reconcile to the balance at that point.
Bank reconciliation month end requirements
A full list of client balances.
Confirm that the client balance agrees with the client bank balance shown on the reconciliation report.
Ask a colleague to sign off the bank reconciliation. They can either sign the bank reconciliation report or use the form.
Print either a Nominal D/E to Bank Balance Check report or a Trial Balance. This nominal report lists each bank account and shows the corresponding nominal account it double enters to. The trail balance lists the bank control accounts as well as the client ledger controls.