Task guide
Reconciling the bank
Importing each bank's statement, matching it to the books, the reconciliation one person prepares and another reviews, the three way reconciliation of a client account, and the month close it holds.
The bank accounts
Finance, Banking, Accounts lists every bank account and mobile money wallet the firm keeps, with its fund, its currency, the offices whose money it receives and whether it is still in use. Each opens its own page. The page leads with what the books hold today, the latest statement, the day it was last reconciled and how many statement lines no match clears yet, and its tabs hold the account's book line by line, its statements, its reconciliations and the rest. Choose Match to the bank from the account's actions to match it.
Importing a statement
Choose Import statement, the account and the format. OFX is read by its own tags. CSV, Excel XLSX, old Excel XLS and PDF use a statement layout, taught once from a sample under Settings, Bank statement formats. The account's default layout is selected. Teach the system a bank's statement layout explains the columns, PDF boundaries, dates and balances.
Read the file shows every line as it will be kept and marks lines already on file from an earlier statement. Check the span and the opening and closing balances the bank printed. Nothing is half imported: a read with changed headings, an unreadable transaction or balances that do not reconcile is refused. Update the layout from this statement opens the retained file for re-teaching. The next version applies to future imports; each saved statement keeps the version it was read with. Scans are marked Read from a scan and must reconcile too.
The account's first statement opens with a line for the balance brought forward, so the book lines from before the bank's history can be matched against it.
Matching the books to the bank
The account's matching page sets the book lines beside the statement lines. Tick the lines on each side that are the same money and choose Match once their totals agree; several lines may match one, and lines on one side that cancel each other, such as a receipt and its reversal, match together. Auto-match proposes pairs of the same amount within the firm's window of days, a reference or cheque number the bank printed scoring higher; nothing is matched until you choose Match them. A match is undone from its line's menu, with the reason.
Working a reconciliation
Choose Start reconciliation and the statement to reconcile to; the reconciliation runs to its closing day. While it is being worked its figures move with every match:
- the statement balance, plus deposits in transit, less payments not yet presented, is the adjusted bank balance;
- the books, plus the bank's lines not yet in the books, is set against it;
- the difference between them.
Each item is listed by kind: payments not yet presented, stale cheques, deposits in transit and bank lines not in the books. A stale cheque is one the firm issued that the bank has still not paid some months after its date (six until the firm sets its own under Settings, Ledger settings). Explain every bank line not in the books and every stale cheque before preparing: whether the payee still expects it, whether it is to be cancelled and written back, or why it stands.
Preparing and reviewing
Prepare asks for your password again and freezes the figures and every item with its explanation. Where a difference stands, say why. A person other than the preparer then chooses Review, with their password again; the database refuses a review by the preparer. Nothing the reconciliation reads may change while it waits for review, and a review is refused if the books or the bank moved since it was prepared. Return to be worked sends it back with the reason.
A reviewed reconciliation is kept as it was reviewed, for good, with every match it relies on. Open report PDF draws it on the firm's letterhead: the account, the day, the figures, each item and its explanation, and who prepared and reviewed it.
The three way reconciliation of a client account
For a client account the reconciliation also sets the client bank control account against the sum of the matters' client ledgers on the day. It balances only where all three agree: the statement adjusted for what is in transit, the control account, and the ledgers, with nothing on the bank's side left out of the books. Post a bank charge or interest on a client account by journal and match it before the reconciliation can balance.
Closing a month
A month closes only once every bank account with money moving in it has a reviewed reconciliation to the month's end or later that balanced. The month's page says which accounts are still owed.
Was this helpful?
Read next
- The client account and its ledgersWhat the firm holds for each matter in each currency, the statement a client reads, the funds held with the control figures, dormant money, quarantine and refused overdraws.
- Move client moneyTransfer client money to office against a bill, refund it by payment voucher, pay a disbursement from it, or move it to another of the client's matters, each asked for, approved by somebody else and carried out.
- The ledger and accounting monthsThe rules the books keep that nobody can bypass, and how months are closed, locked and reopened.
- Residual balances and unclaimed client moneyMoney left on closed or dormant matters, the register of money the firm cannot return with every effort to trace the client, and interest the bank pays on client money.
- Bank accountsOpening a bank account or mobile money wallet with its opening balance, accounts held for one client, changes to where an account is held that somebody else approves, and retiring an account.
- Cheque booksRecording each cheque book the bank issues, who holds it, spoiled and cancelled numbers, and the register of every cheque with those still unpresented or gone stale.
- Teach the system a bank's statement layoutTeach a bank's PDF or Excel layout from a sample, check the complete read, import each month and save a new version when the bank moves its columns.