Enter Bank Statement Details screen

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This topic covers the use of the Bank menu > Enter Bank Statement Details screen including
  4 Performing a bank reconciliation
  4 Some Dont's and Dos
  4 What to do when the reconciliation doesn't
  4 A few comments on Tips, Tricks, Tools and the Grid Utilities
  • What is a bank reconciliation and the reasons for performing bank reconciliations are covered in the Bank Reconciliation topic, but among other things it provides an opportunity to check the accuracy of your data entry.
  • For the purposes of this topic "bank statement" and "bank account balance" means the list of bank transactions which are being reconciled whether it is a real bank statement or just a transaction list and the associated balance.

    Skip to the description of the screen elements

    Overview
  • This screen is where the receipt and payment transactions entered in the system are matched to the deposit and withdrawal transactions made in the bank.
  • For the system to reconcile to the bank there has to be a one for one match (see Notes below) otherwise pressing [Complete] will result in an error message.
  • A reconciliation requires that the Opening Balance plus the amounts in the matched lines add to the same amount as the bank closing balance, at which point the Presented and Difference figures will be the same.
  • If the Presented and Difference figures are different it means one or more of the following:-
      4 the bank transactions and the system transactions highlighted do not agree
      4 the closing balance is incorrect
      4 the transactions cover different dates.
  • When an error is located press [Close] to exit the Enter Bank Statement Details screen and correct the problem.  The date, balances and record matching will be remembered when you return.
  • Once the Presented and Difference figures are the same a reconciliation has been achieved and [Complete] should be pressed.

    Notes
  • One for one match.  Situations will exist where several transactions displayed on the screen grid may be represented by a single figure on the bank transactions and the reverse may also apply.  Examples are cash or cheque receipts from several individual tenants being banked as a single deposit or the direct credit file containing all the individual landlord, supplier and Fees and GST payments which appears as a single total figure on both the bank transactions and on this grid.
  • A valid reconciliation relies upon the user matching the transaction on the screen to the correct bank listing transaction.
  • A reconciliation only shows the total money in the system bank agrees with the total money in the bank not that you have allocated receipts and payments correctly.
  • There may be pairs of transactions of equal and opposite value to act as a "journal transaction" that do not appear on the bank statement.  These will have been entered deliberately and must be presented together to cancel each other out.   An example is reversing money out of the Unidentified Items account with a minus value receipt and entering a (plus value) receipt into a tenant account once the money had been identified.  Presenting both these transaction which add to zero, one minus x dollars and the other (plus) x dollars, has no effect on the reconciliation itself but merely presents these self cancelling transactions.


    Performing the Reconciliation
  • Enter the Closing Date of the bank statement you are reconciling
      4 All transactions with a date greater than the date entered will be in red text and inaccessible.
  • Enter the bank statement page number if available.
  • Enter the Closing Balance from the bank statement.
  • Highlight (double click) items which appear on the bank statement.
  • Highlight pairs of "journal" type transactions.
  • When the bank statement and "journal" transactions on the grid have been matched to those on the bank statement:- 
      4 If the Presented and Difference figures are not the same click [Close], and continue with the next section "When the Reconciliation doesn't".
      4 If the Presented and Difference figures are the same click [Complete] and print and file the Bank Statement Details report.


    Important Concept
    After each bank statement has been reconciled the only items remaining should be unpresented payments and perhaps one or two cash and cheque receipts (unpresented deposits) received recently which have yet to be banked.  There should NOT be a host of other items.

    In a perfect world, a day or so after the end of the month all those cheques would be cashed and the Enter Bank Statement Details screen would be empty after each reconciliation.


    Don'ts
  • Don't use any other amount as a closing balance other than the one on the bank statement itself, ever.
  • Don't change the date so you can highlight incorrectly dated (red text lines) transactions.  Close out and correct the transaction date.
  • Don't combine two bank statement deposits received from one tenant into a single receipt in the system.  Enter two receipts.
  • Don't have unpresented receipts loitering around.  Remember, most receipts wind up in a landlord's account and if the money is there, presented or not, it will be paid out by the system, or you, whether the landlord is entitled to it or not.


    Dos
  • Enter cash and cheques immediately they are received, see When to Enter Cash and Cheque Receipts
  • Reconcile daily, or if you do not enter transactions every day reconcile immediately after entering the receipts.
  • Never pay anybody anything until the system has been reconciled, even when you are certain you know the answer.
  • When matching (highlighting) records on the screen:-
      4 Always work from the printed bank statement to the screen.
      4 If the bank statement shows deposits and withdrawals in two separate columns work down the entire receipts column first and then in a second pass work down the withdrawal column.
      4 If the bank statement shows both deposits and withdrawals in one column work down the entire column only matching deposits to system receipts first and then in a second pass work down the column again only matching withdrawals to system payments.
    -  You may find it convenient to identify withdrawals on the paper bank statement during this first pass too.
      4 If you can not quickly see the transaction you are trying to find on the screen do not go looking for it by scrolling up and down.
    -   Put a mark against the transaction on the paper bank statement and move to the next transaction.
    -   I use a pencilled arrow so I can rub it out when I do eventually find the transaction.
    -  Where a single bank deposit covers receipts from multiple tenants take particular care the screen values do add to the bank statement value.
    -  Obviously you will at some point need to scroll the screen to get the next screen full of unpresented transactions but don't do so to chase transactions.
      4 After the first complete deposits and withdrawals passes start at the top again and work though the marked (arrowed) bank statement transactions and locate them on the screen.
    -  Any incorrect transactions should be corrected, missing transactions entered and those entered a second time deleted.
    -  Repeat this last step until all the marked (arrowed) transactions are resolved.


    When the Reconciliation doesn't
    When the Presented and Difference are not the same and you are sure you have matched every bank transaction to one in the grid correctly but you can not click [Complete] because the message says "The amount "Presented" is not the same as the difference between Opening and Closing Balances" the reason is that a mistake has been made.  I am not being flippant but that is the reason you do not reconcile.  So the reconciliation process has been a huge success.  It has either stopped you paying out an incorrect amount of money or alerted you to the fact that you have already paid out too much to someone.  If you abide by some very simple procedures it will be the former not the latter.     XXXX  add link to "rules"

    So how do we go about finding the problem.  Here are some of the common repeat reasons we get "unable to reconcile" support calls and also a couple of the more obscure ones, some with a brief comment on how it may have occurred, or how to find the problem and maybe how to fix it.

    1.  Transactions not entered or entered twice
  • A common problem is being interrupted while entering the receipts.
  • Cash and cheque transactions not entered see When to Enter Cash and Cheque Receipts
    Remedies
  • Avoid interruptions while receipting - shut your office door and refuse phone calls.  Earthquakes and fires apart anything else can wait.
  • Only use the Transaction grid > [Receipt] button for initial individual receipting, adjustments and corrections
  • Instead speed up the receipting time by using bulk receipting or Tenant Import Receipts

    2.  Transactions entered with incorrect values
  • Data entry errors, typos, whatever you want to call them are often difficult to spot, partly because we see what we expect to see.  So really look at each value when you are trying to find a mistake.

    3.  Missing Transactions
  • Apart from simply failing to enter a transaction the ones which "go missing" on a regular basis are payments.  You can see them in the landlord, supplier or tenant transactions but they are not present on this screen.
  • The reason will be a cheque payment without a cheque number or a manually entered DC payment and the final question will have been answered "No" instead of 'Yes".  See Payments Overview

    4.  Closing Balance incorrect
  • A regular occurrence this one.  It is either a "typo" or the wrong balance taken from the internet banking display printout.  Some banks do not help by updating the account balance displayed when a deposit is made into your account by a "internet direct credit" or by a teller receipt but the transaction doesn't show up until next day after the overnight processing.
  • Check the balance entered carefully.  See Tips and Tricks below
    Remedy
  • Always only take transactions up to "yesterday" when getting printouts or downloading files from the bank.

    5.  Missing bank statement "pages"
  • Another regular occurrence often associated with weekends and holidays.  The bank transactions printed out or downloaded missed a day or more.
  • This can usually be seen by comparing the Opening Balances on the screen and the bank statement.  And that's another good reason not to fiddle the closing balance, see the "Dont's" section below.

    6.  Transactions with wrong dates
  • See the "Dont's" section below
  • The only correct remedy is to press [Close] and correct the date.

    7.  Not reconciling on a "daily" basis
  • Where volumes are low you may only need to enter and reconcile a few times each week and I don't have an argument with that, however, each time you do reconcile you should press [Complete], see why in the next paragraph.

    8.  Not completing the reconciliation after each reconciliation
  • The primary reason we suggest pressing [Complete] after every reconciliation of the "overnight" receipts is that it locks away the transactions from accidental change or deletion.   
  • But some users don't complete the reconciliation because they might want to change or delete a transaction they entered a few days ago and don't want to have a reversing transaction and a correcting transaction appear on the landlord's statement.
  • I make the observation that if the receipt had been entered correctly in the first place there should, in the main, be no need to adjust the earlier one.
  • If you are unsure of the money split put it all, or at least any rent or debt component, into Held.  
      4 The original receipt to Held will not appear on the landlords statement nor will the second one reversing the money from Held
      4 Only the third one which allocates money to rent or debt will appear on the landlord statement.
  • There have been numerous "I don't reconcile" calls where the earlier transaction had the value changed or was accidentally deleted and now there are many more transactions to check through that just the ones from the last completed reconciliation.


    I've Done All That and it Still Doesn't Reconcile
  • Frequently when a "I can't reconcile" support call is received we find the reconciliation covers a number of days which are all trying to be reconciled at once and the approach to take is outlined below.
  • It is important that you don't make assumptions but check every line you are going to match (highlight) as covered above and in the matching recommendations in the Dos section above.
  • For the purposes of discussion the days attempting to be reconciled are the 10th to the 17th
  • Right-mouse click the grid and choose "Unpresent All"
  • Check that the screen Opening Balance agrees with the statement opening balance for the 10th.
  • Enter the 10th as the Date and the bank statement closing balance for the 10th and then check it
  • Match the transactions for the 10th only, as recommended in the Dos section above
  • If you don't reconcile when all the bank transactions are matched to the highlighted screen transactions do not proceed.  The problem lies with the transactions or opening or balances for the 10th.
  • If a missing receipt is in the red text lines press [Close] and change the date of the transaction
  • If there are missing payments print the Bank menu > Bank Reconciliation report and check for unconfirmed payments
  • If the 10th does reconcile I suggest you click [Complete]
  • An alternative is to continue the same reconciliation by entering the 11th in the Date and the Closing Balance for the 11th and match the transactions for the 11th.
      4 I sometimes do this when sorting out problems and I have numerous days to reconcile.  However, I usually press [Complete] at the end of each week and definitely at period end.
  • Repeat reconciling day by day as just covered until the entire set of bank statements from the 10th to 17th are reconciled.
  • If you reconcile to say the 14th but can't reconcile the 15th, reconcile to the 14th and press [Complete] then start afresh from the 15th.
  • If you still can't reconcile get someone else to help.  They don't need to be an "accountant".  Either get them to call the details from the bank statement while you do the screen work or the other way round.  It is mainly to have someone "fresh" looking at the numbers.


    Tips, Tricks, Tools and Grid Utilities
  • Immediately money is transferred between two accounts (journal type entry) go to the Enter Bank Statement Details screen and present both transactions.  If no lines were highlighted the Presented amount should be zero.  This acts as a check on your entry and avoids entering $110 in one transaction and $101 in the other accidentally which then sometimes becomes hard to find.
  • When the Presented and Difference figures are different left click on either field and you will be told the difference between the two values.
  • Transposition errors should be suspected if the difference is divisible by nine with no remainder.
  • To find a record by transaction number, amount or date use the Find Grid Record utility.
  • Use the Bank menu > Bank Reconciliation report to:-
      4 quickly spot any unconfirmed cheque or DC payments, see      XXXX     Link required
      4 do "on paper" checking between the bank statement records and the unpresented receipts and payments in the system.
  • If you can't reconcile and are absolutely desperate to get a reconciliation done:-
      4 DO NOT fudge the Closing Balance figure
      4 instead enter a plus or minus value receipt in the Unidentified Items special landlord account as a temporary measure.
      4 This will mean you are potentially paying out money to someone who is not entitled to it.
      4 You should now be able to reconcile.
      4 You must enter an opposite signed value reversing receipt as soon as possible and correct the error which may entail getting money back from someone who is reluctant to part with it..



    Description of the Enter Bank Statement Details screen

    Refer to the Glossary for information about the Title bar, Menu bar and Navigator bar.

    Date
    The date entered should be the date of the last transaction you are reconciling
    It should always be "yesterday" or earlier
    It can never be after the last day of the current period

    Page
    If you are reconciling to real bank statements, as opposed to bank transactions lists, enter the statement page number
    If you are reconciling to bank transaction lists the number will automatically increment by one every time a reconciliation is completed
    You may like to transfer this number to the paper transaction list for audit purposes.

    Opening Balance
    This field in display only and shows the closing balance of the last completed reconciliation. 

    Closing Balance
    Enter the closing balance of the last bank statement or bank transaction list you are reconciling.

    Difference
    This is the arithmetic difference between the opening and closing balances.

    Presented
    As each line in the main grid is matched to a bank transaction and highlighted this figure will change by the transaction amount.

    Grid content
    XXXX
    The grid columns headings are largely self explanatory, but the following may be of interest:-
  • Type - will show
      4 Receipt
      4 Payment
      4 Direct Credits when the payments are part of a DC batch and Setup menu > Receipts and Banking > Show DCs as a Batch is 
    ticked
      4 Banking if the receipt was paid by Cash, Cheque, Eftpos and are part of a Banking List (Bank menu > Create Banking List > ... > Mark as Printed).
  • Reference - will contain
      4 Any manually entered receipt reference
      4 A Banking List number
      4 A DC Batch number
      4 A Cheque Number when the payment is made by cheque.
  • TenantCode and SortKey - to whom the receipt has been allocated
  • Address - the property street number and name of the property
  • TransText - will display the entry made in the Text box in a tenant receipt.  For other transactions the data is variable.
  • Changed -      XXXX


    Complete
    When the Difference and Presented figures are the same pressing [Complete] will "mark off" the highlighted transactions as being reconciled and they will no longer be able to be edited or deleted.

    Close
    When the Difference and Presented figures are not the same pressing [Close] will allow you to return to the main screens and add, edit or delete transaction which are missing, incorrect or shouldn't be in the system.
    When the Enter Bank Statement Details screen is entered again the "header" details will be as before and all the matched records will still be highlighted.