Cheque Book Reconciliation

When you go to do a bank rec, the first and most important issue is the date

The General Ledger date MUST be set to the closing date of the statement.

The only exception occurs where some people like to do a bank rec on the last day of each month, but their bank statements are issued on say the 10th of the month.  So in that case you rule a line off at the 30th or 31st (or Feb 28th) of the month, and use that date and the balance at that date.

Personally I find it easier to stick to the actual statement date, except for the 30th June.

Your accountant will always want a bank reconciliation statement for each bank account as at June 30

Put in the statement balance (remember to use a negative if overdrawn), then tick on the "No" Radio Button for the Presented Status.  This setting will default to Last View, but generally you only want to look at the Unpresented transactions.

In the bank rec screen, the Receipts (Deposits) are on the left, Payments on the right

On my bank statement, the bank has them the other way around

I find it makes it easier to line them up if I swap them over on the Peach bank rec screen

Just point your mouse at the "Receipts" heading, hold down the right button (the whole column gets selected) and drag it over to the right of the Payments column and let it go. 

It will go back where it was when you close the screen, but I think it helps

I then tick off all the deposits first.  The deposits tend to be in order, as the bank processes them pretty much on the day (night) that you put them in.  So you can run down the page pretty quickly.

Then click the Display button.  This "refreshes" the screen, so only the Unpresented transactions are shown. 

So all the deposits you have ticked off are cleared off the screen.

Then you can start on the payments.

Payments tend to run in groups, so when you have ticked off a number (maybe half a dozen or so), click on the Display button again.  The ones you have marked as presented are cleared off the screen, the rest all move up and its easier to see where you are.  Continue on, marking off the presented cheques/payments and clicking Display to keep clearing them off.

We all get cases where we can't find a transaction.

Sometimes the date or cheque number is wrong, or the amount is wrong

Or there are just so many that we can't find one.

I tend to look at the transaction amount or the date, but it is often quicker to look at the cheque number

You can change the display so it lists in cheque number order ie ID order

On the upper right hand side, click on the ID radio button in "Sort Order"

Click on Date to put the screen back to Date order

You can search for a particular amount or a particular cheque number by using the ID or Amount fields

Eg put an amount you are searching for into the Amount field, then click the Display button

It will display any instances of that amount that are unpresented, and up to the statement date

Sometimes I have marked a payment as presented, but didn't tick it off the statement.

So then I am looking for it, but it won't be in the No list

So put the amount in the Amount field and click on the All radio button under the Presented Status

This will search All transactions - presented and unpresented

When you have found it, clear the amount from the Amount field and tick the No button again

That puts the screen back to "normal"

Another problem I have come across is when a payment has been forward dated.

ie you write the cheque on the 10th, it gets drawn on say the 15th and is on the bank statement, but is nowhere on the bank reconciliation screen when you do a bank rec on say the 25th

If you had accidentally entered the date in Peach as anything after the 25th - eg the 28th of that month, or maybe the 10th of the next month, then it won't be showing in the bank rec screen as at the 25th.

To check this out, change the Statement date to a future date.  When I am searching for a "missing" transaction, I set it well ahead - eg out to say 2010, and put the amount I am looking for in the amount screen.  Click on All under the Presented Status and it will search for all dates out to 2010, presented or not.

I have often found "missing" transactions this way.

If it is forward dated, mark it off as presented and tick it off your bank statement

Reset the date on the bank rec screen back to the correct statement date and click on No under Presented Status

This puts the bank rec screen back to where is was again.

Note that ticking off a forward dated transaction will NOT change the variance.  Your bank rec statement will be "out" by that amount, but it will "wash out" when you catch up to that date.  Just make a note on the bank rec report to that effect.

So I don't worry too much about a transaction dated a bit ahead.  I would only worry about reversing and re-entering the transaction if it either went into the next financial year, or maybe if it was in the next BAS period and it was for a large enough amount for me to want to claim the GST now and not later.

What about entries that are on the bank statement but you haven't entered them into Peach yet?

Usually things like bank fees, direct debits etc

You don't have to close the bank rec down to enter these extra entries

Just click on the Pay_Gen button to bring the payments screen up "on top" of the bank rec and enter the transactions.

Then go back to the bank rec screen and click on Display

The screen will be refreshed and the new entries will be there in the bank rec screen

The same applies to extra Receipts you need to enter, or even the General Journal screen.

And where you find a General Payment or Receipt has been entered incorrectly, you can pop up these screens and Retrieve the offending transaction and corrrect it.

Or for a double entered transaction, change the amount to zero and repost.

HOWEVER - be careful here.  When you retrieve a batch of transactions and change one, ALL the transactions in that batch are stripped out and reposted.  So any that were presented will now be unpresented and will need to be represented when you return to the bank rec screen.  Something to be aware of.

Also note that the General Payments and Receipts screens have "Presented" tickbox in the top right hand corner

So you can mark them as Presented as you enter them
When you go back to the bank rec and click Display, they will already be presented and cleared off the screen, and the variance is updated.

Perhaps don't use that one until you get the hang of it!

Last thing to do - print out the bank rec statements (click the Report button)

I would recommend you always print them out.

You might think it's a waste of paper - which I guess it is - particularly with a "perfect" reconciliation where there are no outstanding transactions

Why it really matters is that the report shows the GL balance as at that date.

So lets say you have a GL balance of $1000, and some outstanding cheques etc

And the variance is zero and it's all good

Then you do next month's bank rec and it just WILL NOT reconcile

You look it over and over, cross and recross in pencil and ink on the bank statement (yes, we've all done that, then gone for the highlight pen)

And it won't reconcile

Very frustrating

And in my experience is often turns out that someone has backdated a transaction into a previous period where the bank rec has already been completed.

So just whip out the last bank rec report and check the GL balance at that date.  Set the date in the Peach General Ledger back to that same date, bring up the bank account ledger and look at the closing balance and see if it has changed.

If it has, you can continue working back to find when it matches again

The backdated transaction will be in the month after that date where it matches again.

Then you can find the transaction and find out who did it!

This method works pretty well, but depends on having that record of the GL balance from the earlier bank recs

The alternative is having to work backwards clearing your bank recs and starting again - a horrible job, and best avoided.

One last tip:  I have on one or two occasions found that where GL transactions have been entered via General Payments or Receipts, then retrieved and altered and saved, then maybe retrieved and altered again, etc that I can't get a bank rec to balance.  Try running the Repost Transaction function under the Setup menu in the General Ledger.  Basically it recalculates the running balances of the ledgers, and it may assist.