A Bank Reconciliation is simply a process that matches your Money In and Money Out Records with your Bank Account. It is an important process because it provides you with a check as to the accuracy of your records and can therefore save your accountant a lot of time at the end of the year.

The balance of your bank account may be different from your records because someone hasn’t banked the cheque you sent to them, or bank charges have been applied but you haven’t recorded them as you haven’t seen your statement. Or maybe someone has paid a direct deposit into your bank that you haven’t recorded.

You need to record your Opening Bank Balance when you first start using the program and then the program will automatically track the Balance per your Records.

The monthly Bank Reconciliation is simply checking the deposits and payments on your Bank Statement against your records and making sure that everything on your bank statement is in your records.

Sometimes there are items in your records that are not on your bank statement, such as cheques you have posted that have not been banked by the persons you sent them to. These are called ‘outstanding’, ‘unpresented’ or ‘uncleared’ items, and when your Bank Statement Balance is adjusted to take these into account, your Bank Balance should be the same as your Records Balance.

To process your Bank Reconciliation, click on the [Reconciliation] tab and a ‘wizard’ will take you step by step through the bank reconciliation process. 

If you are doing a Bank Reconciliation for the first time, ensure that the month you have selected is the first month of records that you want to reconcile. 

The 'Reconciliation Setup' tab will take you to the Opening Balance. You should only ever need to record your Opening Balance when you first start using the program.

Record your Opening Bank Balance:
Your Opening Bank Balance is the balance that would be in the bank if all deposits that have been put into the bank and all cheques written on or before the date you are starting to use the program appeared on your bank statement.

If you have not previously recorded an Opening Bank Balance you will have the opportunity when you do your first reconciliation.

To get started, click on the [Reconciliation Set Up] button on the Reconciliation screen:

1. Opening Bank Balance - Record your Closing Bank Statement Balance for the month immediately preceding the month of your first reconciliation (or $0 if you are reconciling a new account.) Click [Save].
2.Record ‘Uncleared Money In’ - This brings us to the Uncleared Deposits (Money In) page where you need to record any deposits from previous months that have not yet appeared on your Bank Statement. This is unusual with Bank Deposits but sometimes might occur. If it does, you only need to record the total deposit, not the individual transactions as we only need the amount to match the amount that appears on our bank statement. Simply click on [Add Record] and record the last day of the month in Day, and record the amount of the deposit. Allocate the deposit to any Allocation Column (it is before your records commence so should not affect your reports).
3.Record Uncleared Money Out – Using the Add Record tab, record any Bank Payments from previous months that have not yet appeared on your Bank Statement. Remember to record the cheque number as a Reference.
4.Bank Details – Here you can set your default financial institution, by accessing the drop-down menu. If your financial institution is not in the menu, you can include it by clicking the [Edit/New] tab.

Adding a New Financial Institution:
If your bank or financial institution is not listed in the Bank Details section, you can add it yourself by following these steps:
1.Download a bank statement file, in CSV format, from your bank’s website to use as a template.
2.Click on the [Edit/New] button to set your default financial institution.
3.The Reconciliation Mappings screen will appear. Here you can follow these steps:

Step 1 – Select Your Downloaded File: Browse to the downloaded csv file by     clicking on the [Browse] button and opening it. Your data will be displayed on the left side of the screen.
Step 2 – Does the first row contain column titles? This refers to whether there are column titles in the data (e.g.) Date, description, amount, etc… Select Yes or No by ticking the appropriate cell.
Step 3 – Match your data with Cashflow Manager Cloud column headings: For each of the fields in your data, select a field type to map to in Cashflow Manager. Select the fields from the drop-down menu.
Step 4 – Give Name: Give your bank import a name

4.Click [Save].


Processing your Bank Reconciliation:
To begin your bank reconciliation, click on [Reconciliation] via the side panel.
Here, you will be able to choose the way in which you reconcile your accounts:
Manual – reconciling your accounts against your paper bank statement, or
Imported – reconciling your accounts by importing your downloaded bank statement file.

Imported Reconciliation – Downloaded Bank Statement
If you are registered with your bank for internet banking you can download your Bank Statements and automate much of the Bank Reconciliation process. This can potentially save you hours of time, particularly in looking for discrepancies.

You will need to have added your Financial Institution in the Reconciliation Set-Up section. 

There are several steps in this process as indicated by the tabs at the top of the Bank Reconciliation screen but this can have several advantages.

For example, many of your transactions can be automatically matched to save you hours of time. Some banks are better than others in this regard because some list cheque numbers separately, while others include the cheque number as part of a description that is not easy to separate.

Plus, any transactions on your bank statement that have not been entered can be imported and quickly allocated to the correct columns.

To reconcile your records against your downloaded bank statement file:
1.Click on [Reconciliation]
2.Select the Imported [Reconcile to my Downloaded Bank File] option
3.Click on the [Start] button.
The imported reconciliation process is a simple 5 step process. 

Please follow the following steps:
Step 1: Select & Upload your downloaded Bank Statement & Enter the Closing Statement Bank Balance.
1.
Once you have downloaded your bank statement file (CSV), click on the [Browse] button.
2.Navigate to the location of the csv file (where you have it saved on your computer).
3.Click on the csv file and click on [Open].
4.Your csv file will now be uploaded into the reconciliation
5.If the closing balance does not pre-fill, please enter it in the box provided

Step 2: Reconcile Deposits (Money In).
There are several stages in the Reconcile Deposits process:

Money In – Auto-Matched: Your processed deposits are matched to your Bank Statement based on date and amount. Review these entries to ensure they are correct. If any are not correct, click on either the My Deposits or Bank Statement checkbox to remove the match. Then click on [Next].

Money In – Unmatched i.e. Deposits Not Found in Your Records:Your unmatched entries are listed in date order, although you can click on the header for any column that you may wish to sort by.
To match a transaction, click on the checkbox in My Records list, and the checkbox for the corresponding transaction in the Bank Statement list. These matched entries will be moved to the top of the list. Then click on [Next].

Step 3: Allocate Money In
The Allocate Money In window will appear so you can record any transactions you have discovered on your bank statement that have not been entered into the program without having to leave the Bank Reconciliation process. Use the [Add Record] tab to do this. As you are entering these transactions during the Bank Reconciliation process they will automatically be treated as reconciled.
Once you have finished, click on the [Next] button.

Step 4: Reconcile Payments (Money Out).
There are several stages in the Reconcile Money Out process.
Money Out – Auto-Matched: The Total Payment transactions from the Money Out Record are matched to your Bank Statement based on cheque number, date and amount. Review these entries to ensure they are correct. If any are not correct, click on either the My Payments or Bank Statement checkbox to remove the match. Then click on [Next].
Money Out – Unmatched i.e. Payments Not Found in Your Records:Your unmatched entries are listed in date order, although you can click on the header for any column that you may wish to sort by.
To match a transaction, click on the checkbox in My Payments list, and the checkbox for the corresponding transaction in the Bank Statement list. These matched entries will be moved to the top of the list.

Please Note: Transactions will only match if the amounts are the same. If you recognise a match but the amounts differ, you will need to correct the amount in your Money Out Record before finishing your Bank Reconciliation.

After making any corrections, any un-ticked amounts in the My Payments section should be payments recorded in the Money Out Record but not appearing on your Bank Statement (i.e. outstanding payments). 

Step 5: Allocate Money Out
The Money Out Record screen will now automatically list the transactions you have selected to add so you can apply the amounts to the correct Allocation Columns.
To add any payments not shown in the grid, use the [Add Record] option.
You can also breakdown the transaction into more than one Allocation Column.
When you have finished, click on [Next].

Complete your Reconciliation:
The summary information from both your records and the bank will be displayed. If you reconcile then the Records Balance and the Bank Balance will agree.
Click on the [Complete] button.

A message will ask whether you are sure you wish to complete the reconciliation. Click [Yes].

Your reconciliation will now be locked.
Unlocking can be done from the Reconciliation screen. If a month is locked and you click on the Reconciliation section, you will see an [Unlock] button. You can also unlock from within Money In and Money Out.

If there is a discrepancy between your records and bank statement, the [Complete] button will not be present. If this is the case, you must review your records to make sure you have entered everything correctly.
If you need to start the reconciliation again, click on the [Reset] button.

Manual Reconciliation – Paper Bank Statement
To reconcile your records against your paper bank statement:
1.Click on [Reconciliation]
2.Select the Manual [Reconcile to my Paper Bank Statement] option
3.Click on the [Start] button.

The manual reconciliation process is a simple 4 step process.
Please follow the following steps:

Step 1: Closing Bank Statement Balance & Match the Deposits against the credits on your Bank Statement.
1.
Type the Closing Bank Statement Balance for the month in the box provided. This is the balance on your bank statement after the last transaction for the month. (Hint: if the balance is in overdraft, record the amount as a minus.)
2.The Match the Deposits window will list all the processed deposits entered in the Money In section. Check the deposits on your Bank Statement against the list of Deposits. When the deposit on your Bank Statement agrees with the deposit on your list, click in the checkbox at the right side of the deposit in the list. Tick them off on your Bank Statement as well.

Please Note: If a deposit on the list differs from the amount on the bank statement, it may be caused by an error in the bank deposit or the entry in your Money In Record.
If it is an error in the deposit addition, a correction should appear on your bank statement a few days later. The two amounts added together should equal the deposit on your list. If so, click in the checkboxes for the two amounts. If the error is in your Money In Record correct the entry.
Any entries left un-ticked should correspond to the deposits that have been put into the bank too late to appear on the bank statement for the month. This will be rare but may occur on the last day of the month.
Generally, the deposits listed will be those that are outstanding i.e. have not yet appeared on your bank statement. The Reconcile View provides the opportunity to vary the list.

Once you have checked all your deposits, click on the [Next] button. 

Step 2: Add any deposits on your bank statement that you did NOT have in your Money In records.
The Allocate Money In window will appear so you can record any transactions you have discovered on your bank statement that have not been entered into the program without having to leave the Bank Reconciliation process. Use the [Add Record] option to do this. As you are entering these transactions during the Bank Reconciliation process they will automatically be treated as reconciled.
Once you have finished, click on the [Next] button.

Step 3: Match the Payments against the debits on your Bank Statement
The Match Payments window will list all amounts recorded in the Money Out section.
Check the debits on your Bank Statement against the transactions in your Reconcile Money Out list. When you get a match, click in the checkbox at the right side of the payment in the list and tick the entry on your Bank Statement.

Please Note: If a cheque on the list differs from the amount on the bank statement, you have probably made an error on your cheque stub. Leave the transaction unchecked. When you have completed the rest of the reconciliation you will need to correct this in your Money Out Record and then redo the Bank Reconciliation that should only require matching of this transaction.
Any cheques that are not reconciled in the current month will automatically show up in the following month's Match Payments list. Generally, the payments listed will be those that are outstanding i.e. have not yet appeared on your bank statement. The Reconcile View provides the opportunity to vary the list.
Once you have matched the payments, click on the [
Next] button.

Step 4: Add any payments on your bank statement that you did NOT have in your Money Out records.
The Allocate Money Out window will appear so you can record any transactions you have discovered on your bank statement that have not been entered into the program without having to leave the Bank Reconciliation process. Use the [Add Record] option to do this. As you are entering these transactions during the Bank Reconciliation process they will automatically be treated as reconciled.
Once you have finished, click on the [Next] button.

Complete your Reconciliation:
The summary information from both your records and the bank will be displayed. If you reconcile then the Records Balance and the Bank Balance will agree.
Click on the [Complete] button.

A message will ask whether you are sure you wish to complete the reconciliation. Click [Yes].

Your reconciliation will now be locked. 

Unlocking can be done from the Reconciliation screen. If a month is locked and you click on the Reconciliation section, you will see an [Unlock] button. You can also unlock from within Money In and Money Out.

If there is a discrepancy between your records and bank statement, the [Complete] button will not be present. If this is the case, you must review your records to make sure you have entered everything correctly.

If you need to start the reconciliation again, click on the [Reset] tab.

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