Reasons for Bank Reconciliations

Periodically, you need to reconcile your Bank Accounts status in the system with that of your live Bank Accounts. This may result in amendments to the System Bank Accounts, requests for refunds from the real Bank, or re-presentation of Receipt requests. These discrepancies can arise for the following reasons:

• Unforeseen Bank Charges
• Interest Rate Changes
• Errors
• Refused Payments
• Unanticipated Receipts
• Inbound Transfers

Manual vs Automated Reconciliation

The Bank Reconciliation facility allows you to reconcile your bank accounts to the Statements you receive from the bank. Both methods can be used together:

• Manually (described here): Using a printed Bank Statement, choose a date up to which to reconcile your bank, and enter opening and closing statement balances. Then match the transactions in your statement with the transactions returned by the system. If you have several transactions making up a lodgement, you can match the individual transactions in the system with a lodgement record on your statement.
• Automated: If your bank provides electronic bank statements via online banking, you can import them and perform automatic reconciliation using 'matching' rules or offering matching suggestions. If no match is found, you can post the transaction directly. See Generating Bank Statement Files (Online Banking) and‍ Automated Bank Reconciliation.‍ 

Supplementing the Reconciliation process

To reduce workload, full bank reconciliation can be supplemented by interim (daily, bi-weekly, or weekly) matching of records, using imports or manual matching. This allows for immediate response to any discrepancies, such as refused Receipts or Shortfalls, much closer to the point in time at which they arise. However, it is important to perform a full Bank Reconciliation regularly, especially to produce Management Accounts.

See:

 Bank Reconciliation Troubleshooting 

Bank Reconciliation (Manual) (6A.6) - AIQ Academy

Bank Feeds (6B.1) - AIQ Academy

Importing bank statements manually (6B.2) - AIQ Academy

Step One: Open a Bank Reconciliation

Go to Banks > Bank Reconciliation.

Alternatively:

1. Go to Banks > Bank List. 
2. For the relevant bank, click Reconcile Now. 
3. If there are any unreconciled periods, select Current Reconciliation and complete this reconciliation first. Otherwise, click Create New Reconciliation.

Step Two: Enter Bank Reconciliation details

Complete the following header details:

• Bank: In the Bank dropdown, select a bank.  If the Bank Account has a current open Bank Reconciliation, you will be warned. If you selected a bank from the Bank listing grid, this field will be auto filled.
• Reference: Enter a meaningful and unique reference number, such as the Bank Statement No., or other unique Reference. This is a free-text field.
• To: The date to which the bank account will be reconciled should be entered here. This could be the Closing Date of the Bank Statement. It is defaulted to today's date and could be overwritten at any time. All transactions up to this date will be displayed below.
• Opening: The closing balance from the last reconciled bank statement will be brought forward and displayed in this field.  Always make sure that this agrees to your bank statement. If it does not, resolve it before proceeding. 

  Warning

  Failure to rectify previous reconciliation issues compounds subsequent issues. Possible causes include a missing Bank Statement page or the opening date on your physical Bank Statement not matching the closing date of the previous Bank Statement.

   
• Closing: The Closing Balance from your Bank Statement should be entered here. This will become your Opening Balance for the next bank reconciliation.
• Movement: The difference between the Opening and Closing Balances will be displayed here. This value is calculated by the system and cannot be changed by the user.
• View Transactions: Initially transactions will load automatically. Click this if you want to refresh the list of transactions to be reconciled, for example if the date of your reconciliation has been updated.
• System Details (display only): The values displayed here will inform whether all transactions have been matched for this bank. 
  • The system's (GL account) Balance will be displayed here as of date to which the bank statement is reconciled. This is display only field and cannot be changed by the user. When this matches the Closing amount during the matching process, reconciliation can be finalised.
  • Unreconciled Receipts: The sum of all receipts/ lodgements that were recorded in the system but have not gone through your bank account, i.e. could not be reconciled, will be displayed here. This is calculated by the system and cannot be changed by the user.
  • Unreconciled Payments: The sum of all payments that were recorded in the system but have not gone through the bank account, i.e could not be reconciled, will be displayed here. This is calculated by the system and cannot be changed by the user
• Use Record Notes if you need to record a note against the Bank Reconciliation. The list of all notes held against a Bank Reconciliation can be found in the Bank List by going to Reconcile Now > All Reconciliations. 

Prerequisite

Have the physical Bank Statement to hand when you begin the reconciliation process. Once you open a Bank Reconciliation, you can save it at any stage and return to it later.

The Matching Process

Note the following:

• The reconciliation screen shows both matched and unmatched transactions for the bank and timeframe in question, including those imported via the Bank Statement Files. 
• If you have been using the Bank Import facility or matching transactions regularly, many transactions will already be matched. Matches coming from the bank import/feed are automatically marked as reconciled in the Bank Reconciliation screen. 
• The Reconcile button will not become available until all transactions are matched. When this happens the Balance and Closing fields will also match. Therefore, if there are any remaining unmatched transactions from the imported files, these must be cleared before you can finalise the reconciliation.
• See Bank Reconciliation Troubleshooting if you encounter issues with bank reconciliation.

If the Balance and Closing amounts match:

1. Select either:
   •  Match All > Match all transactions (current page) to just match what is visible on screen
   •  Match All > Match all transactions (all pages) to include everything. 
2. These will load all matching transactions. Deselect any that are not relevant. The selected transactions will be marked as matched for future reconciliation. (This does not mean that they are reconciled but rather marked to be reconciled.) 
3. After making your selections, click Save. 
4. Click on Reconcile when ready to complete this reconciliation.

If the Balance and Closing amounts differ:

To view the remaining unmatched transactions, select Un-Matched in the Matched column.

1. Go through your printed Bank Statement and Match transactions as you encounter them. 
   • Grouped transactions, such as lodgements, can be opened to remove individual transactions. When the grouped transaction's balance is correct, it can then be selected as matched.
2. Un-match transactions if needed. 
   • Note, if the match came from the bank import, unmatching it here will not make it reappear in the Bank Import screen as once transactions are matched there, they no longer display on that screen. Instead the manual Bank Reconciliation screen must be used.
3. After making your selections, click Save. 
4. If needed, Clear Imported Transactions (see below).
5. Click on Reconcile when ready to complete this reconciliation.

Print Reports

Use Print Reconciliation Report to view a list of Reconciled and Unreconciled transactions for this Bank Reconciliation.

When you have completed the reconciliation process, imbalances can remain for either or both of the following reasons:

• There are transactions on your physical Statement that are not in your system.
• There are transactions in your system that are not on your physical Statement.

Creating Transactions

1. Go to Banks > Bank List. 
2. For the relevant bank, go to Reconcile Now and select the relevant reconciliation.
3. Go to Create Transactions. This lets you create transactions that are missing from your Bank GL Account. Select the appropriate transaction type - Bank Debit Journal, Bank Credit Journal, Bank Transfer, Supplier Payment, or Customer Receipt, Bank Payment, or Bank Receipt.
4. Enter the transaction details in the screen and click Process. This will update the Bank Reconciliation screen. See Creating Bank Transfers for more details.
5. When you have accounted for all discrepancies, click Reconcile. Once the statement is reconciled it cannot be edited again.

If a System Transaction differs from the Bank Statement and you believe the Bank Statement is correct, then you can amend the system transaction. This will correct the transaction, not only in the system Bank Account but also in the associated Customer, Supplier and GL Accounts. 

Reverse a Transaction

Transactions cannot be deleted in your system’s Bank Account but can be reversed.

1. Open the Bank Reconciliation screen with the relevant bank account.
2. Find the transaction and click Int. No. (Internal Number) to open the Transaction Details screen.
3. Click Reverse to reverse the transaction in the Bank account and the originating Customer or Supplier Account.

See:

‍ Amending Transactions ‍

Uncleared Cheques

You will occasionally have to deal with uncleared cheques. This happens when you make Cheque Payments to your Suppliers and include them in a Supplier Bulk Payment run despite not being completely processed by your real Bank Account.

As described above, Reconcile will remain greyed-out until matching is complete and the Closing Bank Balance from your Bank Statement will be equal to your Bank GL Account inclusive of any Unreconciled Receipts and Unreconciled Payments. When the balance matches, you can click Reconcile. The Bank Reconciliation will be marked as reconciled and will only be editable by Admin users.

Any unmatched Transactions at this stage will then be carried forward and included in the next Bank Reconciliation. If any of these unmatched transactions never enter the real Bank Account, such as a lost cheques, then you must deal with it in both the Bank System and the Payables or Receivables Ledger as appropriate.

Mismatched Deposits

There will be occasions where your bank will reject cheques that you receive for various reasons, such as being undated, unsigned, or with a date that is outside the To date selected in the Bank Reconciliation screen. 

When these are in a System Lodgement, you can click the + plus symbol next to it in the Bank Reconciliation screen. This will expand the Deposit to show the individual cheques it includes. Click Remove, if needed, then Save.

When you remove the cheques from the Lodgement it remains as a Transaction in the Bank Account. You can deal with it by carrying it forward to a further Reconciliation or by reversing it out of the system.

In Progress Deposits

You can have several Lodgements in preparation prior to a Bank Reconciliation, some banked and some in-progress. The system assumes that all Lodgements have been banked and therefore includes them in the Bank Balance and Transaction list. 

As with uncleared cheques, if you leave any In-Progress Lodgements unmatched during the Reconciliation process, they will be carried forward to the next Reconciliation. To ease the Bank Reconciliation process, keep the number of In-Progress Lodgements to a minimum.

If you want to unreconcile a previous bank reconciliation, follow these steps:

To view past reconciliations:

1. Go to Bank > Bank List and find the account. 
2. In the Reconcile Now dropdown, select All Reconciliations. This will bring up a list of previous reconciliations. 
3. In the Reconc. column, deselect the reconciliation and confirm that you will proceed with the un-reconciliation. To unreconcile an earlier reconciliation, all subsequent reconciliations must also be unreconciled, as amendments you make to the earliest ones may cause transactions to flow into subsequent reconciliations.
4. As soon as possible, re-reconcile all the reconciliations that you re-opened in the correct period sequence.