{"id":21479,"date":"2021-08-20T14:40:38","date_gmt":"2021-08-20T13:40:38","guid":{"rendered":"https:\/\/bigredcloud.com\/?post_type=docs&p=21479"},"modified":"2023-06-28T15:25:08","modified_gmt":"2023-06-28T14:25:08","password":"","slug":"preparing-to-do-a-bank-reconciliation","status":"publish","type":"docs","link":"https:\/\/bigredcloud.com\/en\/documents\/preparing-to-do-a-bank-reconciliation\/","title":{"rendered":"Preparing To Do A Bank Reconciliation"},"content":{"rendered":"

Preparing\u00a0for a bank reconciliation<\/h2>\n

When you receive a bank statement and prior to starting the reconciliation in the accounting software you should:<\/p>\n

    \n
  1. Ensure that your have entered into the Cash Payments Book the details of all lodgements made, and that your have entered into the Bank Payments Book details of all cheques etc.<\/em> written. \u00a0Normally the sources for these entries should be your lodgement slips and cheque stubs rather than the bank statement itself. \u00a0The reason for this is that your records should represent, as far as is possible, an independent check of items that appear on the statement.<\/li>\n
  2. Scan through the bank statement to identify items which are not likely to already be in your records. \u00a0Details of bank fees and charges and possibly direct debits are typical examples. Update your records with the necessary information, e.g.<\/em> details of bank fees and charges should be entered into the Bank Payments\u00a0 Book.<\/li>\n<\/ol>\n

    Ticking Items Cleared Through the Bank.<\/strong><\/p>\n

    The first task in doing a bank reconciliation is to identify outstanding items, i.e.<\/em> transactions you have entered in your records but which have not yet appeared on a bank statement. \u00a0The importance of this lies in the fact the difference between our balance and the statement balance should equal the total amount of outstanding items. \u00a0The simplest way to do this is to mark-off or \u2018tick\u2019 those entries that do appear on the bank statement.<\/p>\n

      \n
    1. Select Lookup\/Bank Account or Setup\/Bank Account.<\/li>\n
    2. Highlight the\u00a0bank account required and double click, click on the\u00a0Ledger\u00a0button.<\/li>\n
    3. The screen you should be looking at will be similar to this:<\/li>\n<\/ol>\n

       <\/p>\n

      \"\"<\/p>\n

      Note the following:<\/strong><\/p>\n

        \n
      • The\u00a0Balance\u00a0figure, near the bottom-right, represents the bank balance according to your records. \u00a0It is calculated as the opening balance, plus all lodgements entered, minus all cheques etc.<\/em> entered.<\/li>\n
      • Displayed in the middle of the screen is the list, in date order, of all transactions you have entered which affect this bank account. \u00a0Each item that features on the bank statement should also appear on this list.<\/li>\n<\/ul>\n

        You should now take each item in turn from the bank statement and find it on the list on the screen. \u00a0You can scroll through the list using the arrow, Page Up and Page Down keys. \u00a0When you have found the item on the screen you should check that its debit\/credit amount is the same as it is on the bank statement. \u00a0You can then \u2018tick\u2019 it on the screen to indicate that it has cleared through the bank. \u00a0You highlight the line and then either pressing the space-bar on the keyboard or double-click on it. \u00a0As you do this the amount will be removed from the column headed O\/Standing and a \u2018tick\u2019\u00a0 will appear in the rightmost column on the screen.<\/p>\n

        Note:<\/strong> To avoid overlooking items on the bank statement you should, as you tick items on the screen, also tick them on the statement itself.<\/p>\n

        Note:\u00a0<\/strong>The\u00a0Outstanding\u00a0figure, underneath\u00a0Balance\u00a0near the bottom-right, represents the total of all unticked items. \u00a0This figure changes as you tick items. \u00a0However, the\u00a0Balance\u00a0figure does not change as you tick. \u00a0This is because whether or not an item has cleared through the bank does not<\/p>\n

        affect what the balance is according to your records; only entering details of lodgements or cheques etc.<\/em> can do that.<\/p>\n

        All Items\u00a0Or\u00a0Outstanding Only.<\/strong><\/p>\n

        When you look up the Bank Ledger the list displayed will contain\u00a0all\u00a0the bank entries you have created since the beginning of the Financial Year as well as any items from previous years that were not reconciled before the year-end. \u00a0All the previously ticked items will be displayed as well as those those still outstanding.\u00a0 To avoid looking at all items you can click on the\u00a0\u2018Outstanding Only\u2019\u00a0button to display only unticked items. \u00a0Only items \u2018unticked\u2019 at the start of the session will be displayed.<\/p>\n","protected":false},"excerpt":{"rendered":"

        Efficient bank reconciliation: Prepare, reconcile, and update records accurately. Tick cleared transactions, view outstanding items. <\/p>\n","protected":false},"author":19,"featured_media":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"inline_featured_image":false,"footnotes":""},"doc_category":[210],"doc_tag":[],"class_list":{"0":"post-21479","1":"docs","2":"type-docs","3":"status-publish","5":"doc_category-payments-book"},"year_month":"2026-04","word_count":651,"total_views":0,"reactions":{"happy":0,"normal":0,"sad":0},"author_info":{"name":"apathak","author_nicename":"apathak","author_url":"https:\/\/bigredcloud.com\/en\/author\/apathak\/"},"doc_category_info":[{"term_name":"Payments Book","term_url":"https:\/\/bigredcloud.com\/en\/docs-category\/payments-book\/"}],"doc_tag_info":[],"yoast_head":"\nPreparing To Do A Bank Reconciliation - Big Red Cloud<\/title>\n<meta name=\"description\" content=\"Efficient bank reconciliation: Prepare, reconcile, and update records accurately. 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