Working with 1 General Ledger > 1-5 Bank Reconciliation

1-5 Bank Reconciliation

Important! When your cursor is in the grid area of the 1-5 Bank Reconciliation window, no function keys except F1 are available. You may launch the calculator (F3) after displaying the 1-5 Bank Reconciliation window by clicking in the Statement Cutoff Date text box and then pressing F3.

The 1-5 Bank Reconciliation window, similar to a check register, displays transactions that have not cleared. As you compare the bank statement to the transactions in 1-5 Bank Reconciliation, clear the transactions listed on the bank statement.

You can display transactions using a specific date. In the Statement Cutoff Date box, enter the statement ending date to display all transactions through the specified date. Sage 100 Contractor does not display transactions entered after the indicated date.

Sage 100 Contractor displays transactions in transaction number order. If a check number falls out of numbered sequence, Sage 100 Contractor displays an asterisk (*) next to the transaction number.

After clearing transactions, save the changes. Cleared items do not appear in the 1-5 Bank Reconciliation window.

The Statement Beginning Balance box displays the balance as of the last reconciliation. The amount in the Statement Beginning Balance box does not change until you have cleared transactions and saved the changes.

When you display records for a checking account, the Statement Ending Balance box displays the balance as of the last reconciliation. As you change the status of transactions, the amount in the Statement Ending Balance box changes. A P displayed with a transaction in the Record# column indicates that the transaction is from a prior year.

After clearing the transactions, the ending balance in 1-5 Bank Reconciliation should match the ending balance of your bank statement. After reconciling the account with the statement and you save the changes, Sage 100 Contractor rolls the amount in the Statement Ending Balance box to the Statement Beginning Balance box.

Note: When saving a reconciliation as Final, the records are updated permanently. You cannot undo a reconciliation once you have clicked [Final].

Sage 100 Contractor lets you save a trial reconciliation that is only partially completed. You can then return later to finish the reconciliation.

Tip: The default location when saving the Bank Reconciliation Report as a .pdf file is \MB\your company\Reports. You can save it to a different location.

Reconciling bank accounts with bank statements

Important!  

When your cursor is in the grid area of the 1-5 Bank Reconciliation window, no function keys except F1 are available. You may launch the calculator (F3) after displaying the 1-5 Bank Reconciliation window by clicking in the Statement Cutoff Date text box and then pressing F3.

Before you reconcile a bank account with a bank statement, enter any extra charges or income in 1-3 Journal Transactions that appear on your bank statement that you have not already entered in Sage 100 Contractor. These include automatic transfers, interest, or check charges. To maintain accurate records, it is a good idea to reconcile accounts each month when you receive the bank statements.

If you need to clear a majority of the transactions, it might be easier to clear all transactions and reopen only the items that do not appear on your bank statement. Select all items, and then click the Clear button. Then you can reopen individual items by selecting the item and clicking the Open button.

To reconcile a bank account with a bank statement:
1 Open 1-5 Bank Reconciliation.
2 In the Account# box, enter the bank account number.
3 In the Statement Cutoff Date box, enter the statement ending date.
4 Click the Display button.
5 For each item you want to clear, select the item and click the Clear button.
6 Compare the amount displayed in the Statement Ending Balance box to the ending balance on the statement.
7 If the amount in the Statement Ending Balance box does not match the ending balance on the bank statement, you need to determine the cause of the discrepancy and correct the problem.
8 On the File menu, click Save.

Important! To save a copy of the Reconciliation report for future reference, make sure the Create PDF of the report file check box is selected before you click [Final]. If check box is cleared before you click Final, a report is not created. You cannot go back and perform the reconciliation again to create the same report.

9 On the Save Bank Reconciliation window, do one of the following:
a If you are not finished reconciling the account, click the Trial button. How?
b If you are finished reconciling the account, click the Final button.

Note: A "P" displayed with a transaction in the Record# column indicates that the transaction is from a prior year.

About saving trial reconciliations

Sage 100 Contractor lets you save a reconciliation that is only partially completed. Sage 100 Contractor saves each transaction with the status that you have assigned to it. You can then return later to finish the reconciliation.

Note: When you display the trial reconciliation, Sage 100 Contractor displays any records entered since saving the trial reconciliation.

To save a trial reconciliation:
1 Open 1-5 Bank Reconciliation.
2 In the Account# box, enter the bank account number.
3 On the File menu, click Save.
4 On the Save Bank Reconciliation window, click the Trial button.
To recall a trial reconciliation:
1 Open 1-5 Bank Reconciliation.
2 In the Account# box, enter the bank account number.
3 Click the Display button.

Tip: When you save a trial reconciliation, the next time you recall the reconciliation, the checks and deposits that were cleared still display with a Clear status. However, any new transactions appear with an Open status. The computed balance will be the same. To start the reconciliation over again, clear out the trial reconciliation. How?

Important! To save a copy of the Reconciliation report for future reference, make sure the Create PDF of the report file check box is selected before you click [Final]. If check box is cleared before you click Final, a report is not created. You cannot go back and perform the reconciliation again to create the same report.

To clear a trial reconciliation:
1 Open 1-5 Bank Reconciliation.
2 In the Account# box, enter the bank account number.
3 Click the Display button.
4 Select the Status column.
5 Click the Open button.
6 On the File menu, click Save.
7 On the Save Bank Reconciliation window, click the Final button.

Reconciliation-in-process check box

In the 1-3 Journal Transactions window, Sage 100 Contractor selects the Active in Check Reconciliation check box on all transactions that are included in trial bank reconciliation. After the reconciliation is completed, Sage 100 Contractor clears the check box.

About clearing outstanding bank transactions

Before entering outstanding transactions, you may need to clear existing transactions. Such transactions are usually the result of entering the beginning and period balances.

If you posted individual transactions to enter the ledger account balances using Method 4 as described in the topic Methods for entering financial activity for the current year, clear the items that have been cleared by the bank. How?

For the first time reconciliation for a new company, work on only one account at a time. For each bank account, enter the open bank transactions that are part of the startup ledger balances. If you have written checks or made deposits that are not included in the startup ledger balances, do not enter them at this time. Wait until you have finished entering all start up data.

Because the effect of the outstanding bank transactions are already encompassed by the ledger account balances set up earlier, post the transactions to a clearing account in the period prior to the current period. Suppose you are setting up during period 7. Post each open transaction to period 6. Then post the journal transaction to the end of period 6.

Working on the outstanding items for one bank account at a time helps prevent startup errors. After entering the checks and deposits, enter the journal transaction to zero out the clearing account. Compare your results to the last reconciliation. Then proceed to the next bank account. You can use the same clearing account to enter the balances for each bank account.

To clear an outstanding bank transaction:
1 Open 1-5 Bank Reconciliation.
2 In the Account# box, enter the ledger account number for the bank account.
3 Click the Display button.
4 For each item you want to clear, select the item and click the Clear button.
5 On the File menu, click Save.
6 Repeat steps 2–5 for each bank account.

Comparing open transactions with bank statements

It is often easier to discover errors with a printed copy of the bank reconciliation. You can then compare the records assigned 1-Open status with the bank statement for discrepancies.

To compare open transactions with the bank statement:
1 Open 1-5 Bank Reconciliation.
2 On the menu bar, click Print Records.

About incorrect statement beginning balances

When the amount in the Statement Beginning Balance box does not agree with the ending balance from the previous reconciliation and your account reconciled last period, examine the transactions since the last reconciliation.

Determine the difference between the statement beginning balance in Sage 100 Contractor and the statement ending balance from the last statement you reconciled. Then try searching for a transaction with that amount. How? It might prove helpful to print a copy of the check register from 2-6 Check Register.

It is possible that you accidentally cleared a transaction before it cleared the bank. If this is the cause of the error, change the transaction status back to 1-Open. How?

Look for a transaction that you cleared in a prior reconciliation that has status 1-Open. If you find such a transaction, clear the transaction in 1-5 Bank Reconciliation. How?

A voided transaction can also create an incorrect beginning balance. If a transaction was accidentally voided, you need to re-enter the transaction.

Locating specific amounts in 2-5 General Journals

When the bank reconciliation does not agree with the bank statement, search the journals for a specific amount.

To locate a specific amount:
1 Open 2-5 General Journals.
2 Select the Short Journal report.
3 If you are searching for a deposit, enter the amount in the Debit box.
4 If you are searching for a credit, enter the amount in the Credit box.
5 On the File menu, click Print Preview.

About reconciliation errors

When you cannot reconcile an account with the bank statement, you need to determine the cause of the error. You can display all open records when you eliminate the statement cutoff date. This allows you to immediately search for transactions assigned to an incorrect date or period.

Common reconciliation errors

The following table lists some common reconciliation errors.

Type of Error

Correction

Incorrect posting

If you posted a transaction with an incorrect amount, the transaction amount between the reconciliation report and bank statement differs.

Incorrect bank posting

Checks occasionally clear the bank for a different amount. Look at the magnetic coding at the base of the check to determine the amount paid by the bank. Compare this amount to the amount appearing on the bank statement and to the actual amount for which the check was written.

Incorrect dates

If a transaction appears on the bank statement but does not appear in the 1-5 Bank Reconciliation window, you might have posted the transaction with incorrect dates. To locate the transaction, use 1-3 Journal Transactions and search for the missing transaction.

Missing entries

When charges or credits appear on the bank statement but do not appear in your records, post the charges and reopen 1-5 Bank Reconciliation.

Returned items

If the bank returns a check due to insufficient funds, reverse the check and post the charge for insufficient funds.

Forged items

While rare, it is possible that someone has altered a check amount. Another possibility is that someone has stolen check forms and forged checks.

It is important to identify forgery and alert the bank, thereby eliminating additional problems and preserving your ability to recover lost funds.