How To: Setting Up Bank Reconciliation for First Time Use (15-50)

Overview

Before you can begin reconciling your bank statements, you need to perform a “cleanup” reconciliation to remove any payments and/or deposits from GL that cleared the bank before the beginning date of the current bank statement. The cleanup reconciliation is performed the first time you use this selection and is run for the period prior to the current bank statement period. For example, if the bank statement you are reconciling is dated “06/15 to 07/14,” you will run the cleanup reconciliation for the period of “05/15 to 06/14.”

Let’s take a step-by-step look at how to run the cleanup reconciliation. In this tutorial, we are performing the cleanup reconciliation for the period dated “05/15 to 06/14.” The current bank statement is dated “06/15 to 07/14.”

Step-by-Step

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1. In the Account to Reconcile field, enter the full 12-digit account number being reconciled.
   NOTE: This is how any new bank account is added for the first time.

2. Enter “0” (zero) in the Beginning Balance field.

3. Enter the statement date in mm/dd/yyyy format. In this case, the statement date is the last day of the cleanup period and the ending date from the bank statement (06/14/2003).

4. Enter the ending balance amount, which is the beginning balance amount from the current bank statement (dated “06/15 to 07/14”).
• The decimal point and trailing zeros must be entered for the balance amounts. For example, if the ending balance is $225,000, you would enter “225000.00” in the field.

5. Underneath the fields you just completed, you see the Interest and Service Charges block. These fields are used for a “regular” reconciliation, but for the cleanup reconciliation we will ignore them.

6. Click Ok.

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7. The reconciliation screen now appears with payments appearing on the left and deposits appearing on the right.

8. In the Payments block, check all payments that cleared the bank prior to the current statement’s beginning date. In this example, all payments that cleared the bank before 06/15 should be checked.

9. In the Deposits block, check all deposits that cleared the bank prior to the current statement’s beginning date. In this example, all deposits that cleared the bank before 06/15 should be checked.

10. If you look in the bottom right corner of the screen you will see the difference between the Payments Cleared and Deposits Cleared. Since this is a cleanup reconciliation, the difference between the two amounts might be a large number. Don’t worry about that at this point. The objective of this cleanup is to get the ending outstanding payments and deposits for the next statement period and to make sure that all transactions that cleared the bank are also listed in General Ledger.

11. Once you have cleared all payments and deposits, click Done.
    IMPORTANT: You will not be able to make any changes to the reconciliation after this point.
• You can also click the Finish Later button, which allows you to come back to this selection and finish the reconciliation at another time.

Click image to enlarge.

12. The Adjustments box now appears warning you that “Reconciled items do not balance to statement.” Since you never want to post an adjusting entry for a cleanup reconciliation, leave the G/L Account field blank and click the No button.
• If you need to make changes to the reconciliation, click Back.

13. Decide whether you want to print a Reconciliation Report and/or an Unreconciled Entries Report and the reconciliation is complete.
    NOTE: We recommend printing the Reconciliation Report and Unreconciled Entries Report (to either PDF or paper) every month.