At the end of every month, the bank statement is compared to the system’s transaction journals to ensure that every item on the bank statement has a corresponding item recorded in the system. Once this is accomplished, the second part of the reconciliation is to compare the book balance to the general ledger balance.
A. Reconciling the bank statement to Inform
The ultimate goal of reconciliation l is to match each bank statement transaction exactly to a system transaction until all items on the bank statement are accounted for. The remaining system transactions that have occurred on or before the bank reconciliation date are considered outstanding items.
- If there are unmatched transactions remaining on the bank statement, a system entry should be made to account for it.
- If there are unmatched transactions remaining in the system after all bank statement items are accounted for, then these items are outstanding. It is common for the system to recognize a transaction in the month before the bank statement. Most commonly, these are outstanding checks and disbursements.
- Journal Entries are displayed exactly as entered and ordered by the transaction date assigned to the entry. Always assign a journal date in accordance with the accounting period being affected.
- Cash Disbursements are displayed individually by check and are ordered by check date. If you conform to a logical check numbering system, dates and check numbers will both be consecutive.
- Cash Receipts are displayed by batch. Point of Sale batches are posted as separate transactions, depending on the payment method. On account and miscellaneous batches are posted exactly as specified by the user.
- Go to Accounting > Bank Reconciliation > Bank Reconciliation.
With sufficient permission, you can also access this screen from File > Company > Bank : Reconciliation.
The default bank account appears. Use this account, or choose another from the Bank box.
- Under Statement, choose the last day of the month as Closing Date from the calendar as. It is important to use this last day of the month because the system uses transaction dates to determine whether an outstanding item belongs to a particular month. If you have statements that cut off mid-month as opposed to the end of the month, then you may use the actual statement date.
- In the Balance box, type the statement ending balance. It can be positive, negative, or zero for sweep accounts.
- Click Search. All open and temporarily reconciled items appear.
- Transactions in bold indicate a “parent and child” relationship in which a transaction can be cleared entirely or as individual items.
- You can sort columns by clicking the column head.
- Filter data using the filter icon.
- To export the data to an Excel spreadsheet or PDF file, right-click Reconciliation and choose Export.
- To view details on any entry, click the link in the Description column. The associated Journal Entry, Check Payment, etc, will appear.
- Select the check boxes beside all transactions that have cleared according to your bank statement.
As you mark transactions in the grid, the Balance grid in the upper right corner will populate:
- Balances cleared for Journal Entries, Deposits, and Disbursements
- Reconciled balance, will increase or decrease. based on transactions cleared
- As items are cleared, the right side of the window will build the reconciliation. (Opening Balance + or - Cleared Transactions = Reconciled Balance). The ultimate goal is for the "Reconciled" value to match the "Bank balance" and the "Out of balance" to .equal $0.
- The section under the balance grid is CR Total for a particular day. A CR Total displays based on the date of the cleared transaction, along with a breakdown by payment type for all cash receipts posted on that same date.
- To resume work at a later time, or if there is a difference that you want to investigate, you can save your work temporarily. Click Save. On the Save Reconciliation pop-up, select TEMPORARILY Save Transactions, and then click OK.
- On the Print Document pop-up that appears, you can view, print, or save a copy of the reconciliation report. Canceling the print window does not cancel the reconciliation save.
- Once your reconciliation is in balance, click Save again, and then choose SAVE PERMANENTLY to permanently archive and remove the cleared items from the screen for the next reconciliation.
Re-opening a previously saved reconciliation requires the bank account number, statement date and statement balance.
Click anywhere over the data display and choose Export to Excel.
For problems reconciling the bank statement to Inform see Troubleshooting bank reconciliations.
B. Book Balance vs General Ledger Reconciliation
Once all bank transactions per the bank are cleared in the bank reconciliation screen, and the bank reconciliation is permanently saved, the second step of the process is to compare the book balance to the general ledger balance at the end of the month. This reconciliation can be found towards the end of the bank reconciliation report. It is listed between the list of cleared items and outstanding items.
If you find a variance between the book balance and the G/L Balance, then see Troubleshooting bank reconciliations.