Reconcile a Bank Account

All transactions eg. cheques written, money withdrawn, deposits made and bank charges and interest incurred, should be recorded in Cashbook and then 'matched' with the bank's records (i.e. a bank statement). This matching process is called Reconciling.

Reconciling your accounts is essential to ensure the accuracy of your Cashbook accounting records.

It is recommended that reconciliations be performed on a monthly basis or more often if required.

If this is your first time reconciling your bank account:

Step 1. Add ALL transactions and ensure the opening balance is correct

Make sure you have added all your transactions and your opening balance is correct. (i.e. Your opening Cashbook balance is the same as the opening balance of your bank statement.)

Step 2. Set the frequency of reconciliations

To do this:

Click on Chart icon on the toolbar
Click on the Bank tab
Click on the bank you are going to reconcile
Click on Edit button
The Usual frequency of reconciliations should be set to Monthly. To reconcile your bank account monthly Click on the drop-down menu arrow to select
Click OK button to save

Note: If set as Never, all transaction entered will automatically be ticked like they are reconciled. They are not reconciled. Having these ticked just allows you to do Year-End Processing

To reconcile a Bank Account:

Click on the Reconcile icon on the tool bar
Select Bank To Reconcile - Click on the drop-down menu arrow to select the account that you want to reconcile
Reconcile up to - enter the ending date of the bank statement that you are using in your reconciliation. Enter the date in the dd/mm/yyyy date format or click on drop-down menu to select date from calendar

Note: If set as Never, all transaction entered will automatically be ticked like they are reconciled.

They are not reconciled. Having these ticked just allows you to do Year-End Processing

Bank Statement Balance - enter the ending balance shown on your bank account statement

Note: An overdrawn balance is entered as a negative (-) figure.

The reconcile window displays a list of transactions that have not been reconciled. These are either:

Receipts - money received by the business in the form of cash, cheques or direct bank deposits, and
Payments - money paid out by a business in the form of cash, cheques or direct bank debits.

Note: You can change the sort order of this list by ticking on the Sort List By drop-down menu to Date, Reference, Amount or Description

To reconcile you must compare each transaction on your bank statement with the same transaction in your Cashbook accounting records. Be careful to ensure that the amounts match precisely. (Sorting transactions by date makes this process easier).

Note: Work from the bank statement to the screen, ticking off each item on the statement in order

Note: The Reconciled Balance shown at the bottom left of the screen should match the running balance on the bank statement and you can check periodically during the reconciliation

To 'tick' the transaction on the screen, right click the mouse on the item.
Full transaction Add, Edit and Delete functions are available via the buttons on the bottom of the screen. This enables editing of any transaction 'on the fly'. (I.e. if you enter a transaction incorrectly, you can fix it within this screen, immediately.)

Note: Double clicking on a transaction is equivalent to clicking on the Edit button

Note: You can use scroll bars or the up and down arrow keys to move up and down the transaction list

Note: You can also click the Find button to search for a particular transaction by Date, Reference or Amount

If you have entered all entries correctly and are all ticked off, there will no longer be a Difference. The Reconciled Balance box will be blank and it will now say Account Reconciles.
Click the Print button, if you wish to print the reconciliation.
Click the Record button to save the reconciliation.
Any transactions that have not been ticked, i.e. not matched with a transaction on your bank statement are called either Outstanding Deposits and Payments. These will remain in the reconciliation window until a matched with a bank statement transaction. Check to see if any unticked transactions are not transactions entered twice

Note: A reconciliation can be deleted an re-done at any time, provided the reconciliation does not fall into a BAS period already recorded.

(Click on Transactions > Previous Reconciliations menu option. Select the required reconciliation and click on the Delete button and the Click OK button to confirm.)

CSC Article ID 1367