Bank Reconciliation

Use the Bank Reconciliation feature to quickly reconcile your bank accounts in the system with your monthly bank statements.

Do the following before you start:

• Post all bank related transactions: Verify that all bank related transactions (cash receipts, cash disbursements, and General Journal Entries) have been posted to the General Ledger.  Run the Pre-Posting Report and use the statement date to filter the report. If there are bank related transactions waiting to be posted, be sure to post them to the General Ledger before starting the bank reconciliation.  This is important because only posted transactions appear on the Bank Reconciliation.

• Verify handwritten checks have been entered: Double check that the dates and amounts are correct.

• Confirm automatic transactions have been entered, e.g. direct deposit, electronic payments, ACH, EFT.

• Paychecks complete: If paychecks are written out of the account you're reconciling, confirm that all payroll checks have been entered.

• Complete bank deposits: Check 'Make Deposits' and 'Merchant Card Sweep' to ensure that all deposits for the statement month are complete.

• Record and post merchant fees: Merchant fees need to be recorded and posted, including those on the bank statement.  We recommend using General Journal Entry to enter these fees so they can be checked off during the bank reconciliation.

• Checks have been voided: Confirm that voided checks have been marked as voided.

• Ensure all journal entries for the month have been entered: Most General Journal Entries should be marked as cleared.  The most common exception is journal entries created for deposits or withdrawals that might not have cleared the bank.

• Do not enter earned interest and monthly bank service charges: The interest you earn on the bank account, and the monthly bank service charges are entered when you do the bank reconciliation. Other charges (for example, returned check fees) should be entered using General Journal Entry.

Bank Reconciliation:

1. Complete the Statement tab: Open the Bank Statement screen and then enter the bank statement information, including any earned interest and monthly bank service fees.

a. Go to Administration > Accounting > Banking > Bank Reconciliation.

b. Click Add New Statement.

c. Open the Statement tab.

d. Bank Account: Select a bank account from the drop-down menu.

• This is the bank account that matches the statement you received from the bank.

• What if the bank account does not appear? Bank accounts are created in the chart of accounts just like GL accounts, but you also have to check the This is a Bank Reconciliation Account box.

e. Statement Date: Enter the date that appears on the bank statement.

• A summary of the last bank reconciliation appears in the Last Statement section.

f. Statement Balance: Enter the ending balance on the bank statement.

g. Use the interest section to record any interest on the bank account.

• Amount: Enter the earned interest on the bank statement.

• Posting Account: Select a GL account for the interest.

• Posting Date: Date you want the interest to post to the GL once you reconcile the bank statement. By default, this is the Statement Date. You can select a different date, but it should be in the same month as the statement date. 

h. Use the Bank Charges section to enter the monthly service bank charges.

• Amount: Enter the monthly bank service charge amount.

• Posting Account: Select a GL account for the monthly bank service charges.

• Posting Date: Date you want the charges to post to the GL once the reconciliation is complete. By default, this is the Statement Date. You can select a different date, but it should be in the same month as the statement date.

I. Click Next when complete.

1. Complete the Deposits tab: Use the Deposit tab to select each deposit that has cleared the bank.

a. Check the box next to each deposit that has cleared the bank.

• Summary totals at the bottom of the screen update as you select transactions

• Click on a column heading to sort the transactions. For example, click on the Deposit Amount column to sort the transactions by deposit amount. This can be helpful when searching for a deposit of a specific amount.

• What if a deposit doesn't match? If a deposit in Evosus does not match a deposit on the bank statement, look for an adjusting journal entry. For example, if a deposit was entered in Evosus for $300, but the bank has a deposit of $325, look for an adjusting journal entry of $25 that may have been made to adjust the deposit.

• What if you check the journal entries, and the deposit is still missing in Evosus? If the deposit was never entered in Evosus, use Make Deposits to enter the deposit.

• Click Save and Finish Later on the Reconcile tab if you need to enter an adjustment/transaction: Open the Reconcile tab and click Save and Finish Later. This saves the bank reconciliation so that it can be selected later. Use General Journal Entry to create a journal entry or enter the transaction that was missed, and make sure the date on the transaction is in the same month as the statement period. If you cannot change the transaction date on the form when entering the new transaction, you must change the processing date before creating the transaction. Remember, only posted transactions show up in the bank reconciliation. Use Initiate Posting to post as of the last date of the statement period.'

b. Click Next when complete.

1. Complete the Withdrawals tab: Use the Withdrawals tab to select the withdrawals that have cleared the bank.

a. Check the box next to each withdrawal that has cleared the bank. 

• What if a withdrawal doesn't match? If a withdrawal in the system does not match a withdrawal on the bank statement, look for an adjusting journal entry. For example, if a withdrawal was entered in Evosus for $500, but the bank has a withdrawal of $505, look for an adjusting journal entry of $5 that may have been made to adjust the withdrawal.

• What if you check the journal entries, but the withdrawal is still missing? If a check was never entered in Evosus Legacy Software, use Write Checks to enter the check. For example, this can happen if a handwritten check was never entered into Evosus.

• Click Save and Finish Later on the Reconcile tab if you need to enter an adjustment/transaction: Open the Reconcile tab and click Save and Finish Later. This saves the bank reconciliation so that it can be selected later. Use General Journal Entry to create a journal entry or enter the transaction that was missed, and make sure the date on the transaction is in the same month as the statement period. If you cannot change the transaction date on the form when entering the new transaction, you must change the processing date before creating the transaction. Remember, only posted transactions show up in the bank reconciliation. Use Initiate Posting to post as of the last date of the statement period.

b. Click Next when complete.

1. Complete the Reconcile tab

• If Difference is not zero: Return to the Deposits and Withdrawals tab and continue making adjustments. Click Save and Finish Later to save the bank reconciliation and return to it later.

• If Difference is zero: Once all deposits and withdrawals have been selected, the Book Balance at the bottom of the screen should equal the Register Balance, and the Difference is $0. Click This Statement is Reconciled to complete the bank reconciliation. The Bank Reconciliation Report appears. You can reprint this report at any time using the Print button on the Bank Statement Search screen (Administration > Accounting > Banking > Bank Reconciliation).

Reprint a Bank Reconciliation Report
Follow the steps below to print a Bank Reconciliation Report for a bank reconciliation that has already been completed. For example, follow the steps below to reprint the Bank Reconciliation Report for the bank reconciliation done the previous month.

1. Go to Administration > Accounting > Banking > Bank Reconciliation

2. Select Reconciliation in the Filters section. Only completed bank reconciliations appear in the screen.

3. Highlight the bank reconciliation you want to print.

4. Click Print.

Cancel a bank reconciliation
Completed bank reconciliations can be canceled. Canceling a bank reconciliation will return all cleared transactions to the queue to be reconciled in a new statement.

1. Go to Administration > Accounting > Banking > Bank Reconciliation.

2. Select Reconciled in the Filters section.

3. Highlight the bank reconciliation to cancel.

4. Click Cancel Statement.
    

What do you need to know?

• Accounting period must still be open: You can only cancel bank reconciliations in accounting periods that are still open. If the accounting period is closed, you have to reopen it and then cancel the bank reconciliation.

• Bank reconciliations can only be canceled from newest to oldest. For example, if you want to cancel the March bank reconciliation, but April is already reconciled.  You must cancel April, then cancel March.

• Reversing entries are created if already posted: If the bank reconciliation already posted to the General Ledger, a reversing entry is created as of the bank reconciliation date for any interest or bank charges applied to the bank reconciliation. You will see the reversals in the next bank reconciliation you create and should mark the original charges and reversals as "cleared."

Security Permissions Required

Implications
Accounting

Related Reports

• Bank Register (Administration > Reports > Accounting > Banking > Bank Register): View all Transactions affecting a bank account and whether they are cleared or not.

• General Ledger (Administration > Accounting > Accounting Desk > General Ledger): View detailed transactions of the accounting sub ledger for a specific date or batch.