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Bank Accounts

Reconcile Accounts

Before you can reconcile accounts, make sure you've set up the specific cash account(s) you want to reconcile. In the Bank Accounts window, this is the information entered under Primary Cash Account. Only active bank accounts can be reconciled. Also, if you require posting, you must post all transactions before reconciling.

PDS Ledger maintains a complete list of transactions that involve a cash account, including receipts, receivables, disbursements, paid invoices, and journal entries. Selecting or clearing items in this list has no effect on the actual transactions in the program.

Using the Bank Reconciliation process, you can keep track of which cash account transactions have cleared the bank. This process is not required to keep the Chart of Accounts balanced, but is a convenient way for you to keep your checking accounts reconciled.

  1. On the Other Information tab, click Bank Accounts > Bank Reconciliation. Alternatively, you can click Reconcile This Account after you set up the cash account.
  2. Select the bank account, and enter the date of the statement.
  3. If you're reconciling this statement through today's date, select No Cutoff. Otherwise, select Use Cutoff Date and enter the date.
  4. Enter the statement ending balance, and click Next.
  5. The Deposits window displays a list of transactions that include an increase (debit) to the selected cash account(s).
    1. Select Cleared for any transactions included on your bank statement or those affecting the cash account during this billing cycle.
    2. To see unreconciled, select Only Unreconciled Transactions. To show all transactions, including previously reconciled items, select All Transactions.
      Note: Items are listed by transaction type, then by date. All receipts are listed together in date order followed by receivables in date order. Look carefully through the list to find all the items on your statement. Voided receipts and receivables do not display in the Deposits window.
    3. Click Next.
  6. The Checks/Withdrawals window displays a list of transactions that include a decrease (credit) to the selected cash account(s). Voided checks do not display in this window.
    1. Select Cleared for any transactions included on your bank statement or those affecting the cash account during this billing cycle.
    2. To see unreconciled, select Only Unreconciled Transactions. To show all transactions, including previously reconciled items, select All Transactions.
    3. Click Next.
  7. In the Bank Charges Paid window, enter any charges included in this bank statement that weren't previously entered. Enter expense account data. If you're reconciling multiple accounts, any entered in this window are debited and the primary cash account is credited. Click Next.
  8. In the Bank Interest Earned window, you can enter any money not previously entered that the bank paid to you on this statement, such as interest. Enter the income account information. If you're reconciling multiple cash accounts, any accounts entered here are credited and the primary cash account is debited. Click Next.
    Note: A journal entry is created when information is entered in the Bank Charges Paid and Bank Interest Earned windows. You can view these journal entries in the Adjusting J.E. window of the program.
  9. The Total Balances window displays a summary of activity and tells you if your bank statement balances with the program.
    • If you are using accrual basis accounting, you'll see a line item for Accrual Rcv./Inv. Adj.. This line adjusts for outstanding receivables or invoices in prior years, which are not reflected in the ledger balance.
    • Print Outstanding—Print a list of all unreconciled transactions. This list does not include items equal to $0.00.
    • Finish Later—Leave the bank reconciliation process. You can research any issues and return to finish the process later.
    • Back—Return to previous windows to verify or correct any items selected or entered, including the statement balance.
    • Reconcile—Reconcile selected items, enter the Interest and Charges, and print a summary report.
      CAUTION: If the adjusted totals are not equal, then the bank statement does not balance with the cash account. If your unreconciled difference does not equal zero, make sure you account for all values before you click Reconcile. If you proceed with unreconciled differences, it can be difficult to track down bank mistakes or missed entries. For help on balancing this total, see Tips on Balancing.
  10. If you clicked Reconcile, a dialog box displays to indicate that the reconciliation is complete.
    • Reconciliation Summary Report—Print a summarized report of the reconciliation.
    • Outstanding Checks/Deposits—Print a report of outstanding checks and deposits.
    • Reconciled Checks/Deposits—Print a report of reconciled checks and deposits.
    • Batch Report—Print a batch report of the charges paid and interest earned journal entry.
    • Account Summary—Print a summary of the accounts used in the charges paid and interest earned journal entry.
  11. When you're finished, click Close.

Tips on Balancing

Here are some tips if your bank statements does not balance with the cash account(s).

If the unreconciled difference is positive, the statement balance is less than the ledger balance. The following could be causes:
  • Checks are too high. You may have cleared some items that are not on the bank statement.
  • Deposits are too low. You may have items on the bank statement that have not been entered in the program.
  • Bank charges are too low.
  • Bank interest is too high.
If the unreconciled difference is negative, the statement balance is greater than the ledger balance. The following could be causes:
  • Checks are too low. You may not have cleared items that are on the bank statement.
  • Deposits are too high. You may have entered items in the program that are not on the bank statement.
  • Bank charges are too high.
  • Bank interest is too low.
Note: Select All Transactions in the Deposits and Checks/Withdrawals windows to view items that have already been reconciled. You can unreconcile them by clearing the checkbox. This way, you can reconcile again something that was mistakenly reconciled. For example, if you have two checks for $300 each and you reconciled the wrong check.
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Last updated: October 29, 2024