LA GL - Bank Reconciliation (1-12)

Purpose of Bank Reconciliation 

The General Ledger > Data Entry > Bank Reconciliation routine verifies the GL balance
against the actual bank statement balance. Thus, if the bank said there was $10,000 in the
account, and the General Ledger said it had $20,000, the Bank Reconciliation routine walks you
through the steps to bring GL and the bank into agreement!
Here are a few tips to help you get off to a good start with this routine.

Go to Tips on Finding Why your Bank Reconciliation is Out of Balance

To load outstanding checks/deposits not listed in Bank Reconciliation

If you have outstanding checks or deposits that are reflected in your General Ledger but that the Bank
Reconciliation routine does not recognize, follow these steps.

 

  1. Checks: In General Ledger > IndividualTransactions, enter a CD (Cash Disbursements) Journal transaction that credits the checking account (a minus entry) for the amount of the check. Enter the check number in the field provided.
  2. Enter a balancing CD Journal transaction that debits the Fund account (a positive entry) for the same amount.
    • If the checking account is a General Fund account, debit the General Fund Balance F account.
    • If the checking account is a Restricted Fund account, debit the LF or LT account for that fund.
  3. Next, offset these entries using the GJ Journal: debit the checking account and credit the Fund Balance account.
    • The CD Journal entry will update Bank Reconciliation and the GJ entry will cancel out the amount so your Checking and Fund account totals are not impacted.
  4. Deposits: Follow the same steps to record deposits that are already reflected in the GL but Bank Reconciliation does not see. However, this time make a CR (Cash Receipts) entry to debit checking and a balancing CR entry to credit the fund account.
  5. Offset these entries using the GJ Journal: credit checking and debit the fund.

 Go to Tips on Finding Why your Bank Reconciliation is Out of Balance

To get started with Bank Reconciliation

If you have been using Logos Accounting for awhile, but have not been using the Bank Reconciliation
routine, first complete a manual reconciliation to ensure that the bank agrees with GL. Then 

 

  1. Open Bank Reconciliation. Do not enter a Closing Statement Balance, but select Next and proceed to mark all cleared checks and deposits.
  2. Verify that the unmarked items on both the Checks and Deposits tabs agree with your list of outstanding checks and deposits in your manual reconciliation.
  3. If your bank statement shows any items (e.g., bank charges, etc.) that have never been entered into Logos Accounting, select the Checks tab and click the Add Chks/Adj to enter any reductions to your bank balance as Adjustments. Select the Deposits tab and click the Add/Dep/Adj button and enter any items that increased your bank balance. See Adjustments note on next page.
  4. When you are certain that the outstanding checks and deposits match your manual reconciliation (See amounts on the right panel of the Bank Reconciliation window.), and the Difference is not zero (0.00), press the Back button and enter the Difference amount as the Closing Statement Balance. This will bring your bank reconciliation into balance for the next time you reconcile.
  5. Select Next again and then Finish, to complete this initial reconciliation. 
    • If you need to end a work session while the Difference amount is not zero (0.00), clicking Finish will save all entries made in the routine, but you cannot print the Reconciliation report. You can then return to this routine later to complete your entries. In the meantime, you can continue working in the program as usual. 
    • Once the Difference amount is zero (0.00), clicking Finish posts all entries made here, and then at the end of the routine, you are prompted to print the Reconciliation report, which should then be attached to your bank statement. (A PDF file of the Reconciliation report is automatically created in the \gl\[data]\bank_rec folder, where [data] represents the current data directory. You can view or print the report at any time by marking the Bank Reconciliation Reports check box in the Reports panel > Batch List routine.)

The Opening Statement Balance

After reconciling, the next time you open Bank Reconciliation, that Closing Statement Balance
will be the new Opening Statement Balance. The Bank Reconciliation only uses that amount as
a visual reminder of where you left off last month. All calculations work from the closing balance
you enter each month from your bank statement. If the Opening Balance is ever different from
the previous month’s Closing Balance, it is most likely that someone updated this number on the
Checking Accounts window accessed from the Banking screen in Preferences. 

Since the reconciliation calculations work totally from the Closing Balance amount, you need not
be concerned about the Opening Balance amount. You can edit the date and amount, if desired, on the Banking screen. 

If You Enter Adjustments
The Add Chk/Adj and Add Dep/Adj buttons in this routine let you enter items that appear on your
bank statement but that have not yet been applied to your General Ledger. If you use this function and
then click on the Finish button when you are not yet in balance, the routine retains these amounts. You
can then return to this routine to complete your reconciliation and when the Difference amount is zero
(0.00), clicking Finish will post the adjustments.
If you enter an adjustment incorrectly, go to the Adjustments tab and unmark the checkbox in
front of the item. It will then be ignored in the calculations and posting will clear it.


If You Are Catching Up…
If General Ledger has not been reconciled with your bank statements for a number of months, and
especially if you have voided any AP or PR checks during that period, we recommend that you do a
single reconciliation of the most recent bank statement rather than trying to reconcile to each prior
month’s statements. Reconciling voided checks can be a problem if the Void on date set in the Void
Checks routine is in a different period from the date when the bank actually voided the check.

.

**If Bank Reconciliation is out of Balance…**

Determine if the problem is in this month or a previous month.

  1. Enter the amount and date shown for the Opening Statement Balance and Date in the Closing Statement Balance and Date. Press Next.
  2. Clear any check-marks for Checks, Deposits and Adjustments.
  3. If the Difference is zero (0.00), the problem is in the current month. Click the Back button and re-enter the current bank statement’s Closing Balance and Date. Then go to Step #3.
  4. If the Difference is not zero, the problem is in a prior month, possibly due to having reclosed
    the prior fiscal or posting something to a prior period.

Locate problem in prior month.

1. Keeping the Bank Reconciliation routine open, open the Batch List routine, mark the Bank Reconciliation Reports check box and select the report for the prior month.

 

  • Ending Statement Balance on the report should equal Ending Balance on the Bank Reconciliation screen (right hand side).
  • Outstanding Deposits on the report should equal Outstanding Deposits on the screen.
  • Outstanding Checks on the report should equal Outstanding Checks on the screen.
  • Adjusted General Ledger Balance on the report should equal Adjusted GL Balance on the screen.

 

2. If the difference is in the Outstanding Checks or Deposits, press Next on the Bank
Reconciliation screen. An alert will tell you that you are out of balance. Select Yes.

3. Select the Outstanding button and compare this report to the Outstanding list section
on the Bank Reconciliation report. Look for anything that was added or voided since that
reconciliation was done.

4. If the GL Balance is different, the problem may be due to:

  • Adjustment entries made during the reconciliation process. If those entries are made with a date prior to the Opening Statement Date or after the Closing Statement Date on the initial screen, the routine will reconcile (Difference = 0) for that month, however, the next time you reconcile it may not.
  • Entries made in a prior year and then that year was not closed again, or the year was closed again after making new entries that caused the balance to change. To research this difference ―

 

    1. Open View Accounts, select your Checking Account and the By Date option, setting the date range to span the period for the Bank Reconciliation report. You may see the difference right away.
    2. If not, compare the Adjusted GL Balance from each month’s bank reconciliation report to the End Balance for that same period in View Accounts.
    3. Set View Accounts to cover the entire year and in the Preview, use the Search (binoculars) icon to look for the amount by which you are out of balance.
    4. Export the View Accounts report to Excel (not Send to Spreadsheet). After you have opened it in Excel, sort by gl_hist key, allowing you to view entries that were made after the last bank reconciliation. 

Locate the problem in current month

1. If the difference is in the current month, it may be that a check was voided in the wrong period, (after the reconciliation date). See Voided Checks

2. If you still have not found the difference, gather four pieces of information

  • The bank statement
  • The Outstanding items from the last bank reconciliation (Batch List > BankReconciliation Report)
  • The Outstanding items from the current reconciliation (In Bank Reconciliation, press Next. An alert will inform you that you are out of balance. Select Yes and then print the Outstanding Report. Do not choose the Outstanding Check report from the first screen of the Reconciliation routine.)
  • The View Accounts report for the Checking Account in the period you are trying to reconcile 

Match items —

  1. Start by matching items on the bank statement to the outstanding items from the bank reconciliation.
  2. Next match the deposits on the bank statement to the deposits on the View Accounts report.
  3. Then match the checks on the bank statement to the checks on the View Accounts report. At this point, everything on the bank statement should be marked.
  4. Then match any outstanding items on the prior month’s reconciliation report that are not marked as still outstanding for the current month.
  5. Finally match outstanding items on the View Accounts report to the current month’s outstanding list. Anything not matched is probably the cause of your out-of-balance condition in Bank Reconciliation.


Voided Checks

Checks voided in the wrong period are the Number 1 cause for out-of-balance conditions in the Bank
Account when trying to reconcile with your bank statement.

Find voided checks 

  1. Select General Ledger > Reports > Checks & Deposits > Check Lists.
  2. Choose the Checks by Date Written option and enter the date range that you are reconciling.
  3. In Print Preview, use the Search  icon and type an asterisk (*) to find any voided checks (plus the header which states Check numbers flagged with “*” are Voided.
  4. Write down the name of the vendors who have voided checks. (One of the voided checks could be the amount of your out-of-balance condition). After identifying the vendors, close the report.
  5. Open Accounts Payable > Define Vendors. Find the vendor record noted above and select the Check History tab. Voided checks have a zero dollar amount on this tab. Choose the check in question and select Display GL Distribution. There will be entries for the original check and for the voiding transactions. If the date for the voiding transactions is outside the date range that you are reconciling, you know this is the problem. If not, move on to the next vendor.
  6. Once you find the correct vendor, select the Print icon on the Check GL Distribution window. 

Repair a check voided in the wrong period

  1. Go to General Ledger > Individual Transactions. Your entry will be in two parts:
  2. First, exactly reverse the voiding transactions on the Check GL Distribution report from the Vendor record, using that same date. These entries will be for the GJ Journal which will generate an alert that you are trying to post an entry to a Checking Account for a journal other than CD or a CR. Select Yes in this case. 
  3. Next, enter the same voiding transactions, however, give them a date that is equal to or before the date of the bank reconciliation. Again, this is a GJ entry. After posting, your bank account will be in balance if problem was the the voided check.
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