PSA L&P - Bank Reconciliation: How to reconcile your bank statement Basic Steps/Instructions

How to reconcile your Bank Statement Basic Steps/Instructions

When marking an item on the bank reconciliation you always mark at least two items 

  • Mark a check in the Reconciliation and mark the check on your Bank Statement
  • Mark a voided check and mark the Voiding Journal Entry both in  Reconciliation
  • Mark a deposit in the Reconciliation and mark the deposit on your Bank Statement
  • Mark a journal entry and mark either a voided check both will be in the reconciliation or, Mark a journal entry in the reconciliation and mark either a check or a deposit on your bank statement

 

To begin 

Go to Ledgers and Payables Tab → Process Icon → Bank Reconciliation 

 

  • Using the bank statement as a guide, enter the information in the appropriate boxes. 
    • Be sure to use the Bank Statement Date
      • The date cannot be changed once you submit this page unless you delete the entire bank reconciliation. 
    • Service charges and interest income may be added on the initial screen which will create corresponding journal entries; if you have already entered the Service Charges or Interest Income as a Journal Entry, leave these blank. You will be able to mark them as you reconcile.

 

  • On the Reconcile Bank Account screen below, the red outlines indicate where the information you entered from the bank statement displays.  
  • All other information comes from your transactions (checks, deposits and journal entries). 

 

 

Checks:

  • Using your bank statement as a guide, mark off all checks that have cleared. Once you have marked all the checks that have cleared, look at the cleared check total and match it to the bank statement cleared checks total

 

 

  • If the numbers do not match, check for errors. 
  • Note: If you have a journal entry that is showing on your bank statement as a check you will need to add the cleared other and cleared checks together. Once you have all issues resolved with the checks, write down the cleared other amount. This will help you when you work on your deposits.
  • Do not process voided checks until you have matched the cleared checks and cleared deposit to the totals on the bank statement.

Information on how to locate errors may be found at the bottom of this article

Deposits

  • After completing your checks, use the same process for your deposits. 
  • Using your bank statement as a guide, mark all deposits that have cleared. Look at the cleared deposits total and match to the bank statement cleared deposits total. If the numbers do not match check for errors. 
    • Note: If you have journal entries that are showing on your bank statement as a deposit you will need to add the cleared other and cleared deposits together. Remember that if you had cleared checks showing in the cleared other you will need to use the amount you wrote down to match the deposit totals. 
  • If your cleared check and cleared deposits match your bank statement, review any journal entries that have not been cleared. 

Journal Entries

  • Voided checks: When a check is voided, the check stays in your data but is flagged as 'voided.' In addition, a journal entry is created which reverses the check. When you void the check, you choose the date of the reversing transaction. If you accidentally deleted this voiding journal entry, you must re-create it for your reconciliation to balance.
    • Mark both the journal entry and the check that was voided.

Final Review

  • Review any unmarked transaction
    • Are there any unmarked transactions that need to be addressed or do you feel that they are outstanding transactions that will be cleared up on future bank reconciliations? 

 

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Troubleshooting Checks

  • If you have checks showing on your bank statement that are not showing on your bank reconciliation:
    • Look to see if the check was entered as a journal entry. 
      • A check recorded as a Journal entry will show in the cleared other as a negative number (-100.00)
    • Go to the check screen → find check, and search for the check. 
      • If  the check is found click on Go and review the Cleared Status, Void Status, Transaction Date, and Bank Account
      • If the check is not found, enter the transaction. 
      • Review the totals again 
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Troubleshooting Deposits

  • Look to see if a deposit was recorded as a Journal Entry. It will show as a positive in cleared other (100.00) 
    • If you had a amount in cleared other when you finished your checks and had journal entry deposits you would need to subtract the cleared checks number from the cleared other. The difference would be added or subtracted from the check total to get the number to match with the bank statement. 

Related Articles

How voiding a Pseudo Check affects my Bank Reconciliation

Top 10 Reasons a Bank Reconciliation Won't Balance

How to record the transfer of funds from one bank account to another

If you need professional services to help resolve your bank reconciliation issues, there is a minimum charge of $225 per hour with a one hour minimum. Simply email support and ask for a Professional Services Contract.

 

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