Reconcile Accounts

Bank accounts and credit cards need to be reconciled when a statement from your bank or credit card issuer is received. Your cash accounts should also be reconciled with your cash book at regular intervals, to ensure that your cash account reflects the correct amount of cash in your physical cash box.

Merchant accounts should be reconciled on a daily basis or when the merchant transfers money to your bank account.

Where Are Accounts Reconciled

Bank And Cash Accounts:

Go to New Bank Reconciliation.

Credit Cards:

Go to New Credit Card Invoice

Merchant Accounts:

Go to New Merchant Transfer

What is Reconciliation?

When you reconcile an account, the transactions you have entered are matched with the transactions recorded by your bank, your credit card issuer or your merchant. If an account is not reconciled, there may be a mismatch between the balance of that account and the balance of the real account.

Thing To Look Out For

The Account Contains a Transaction That Does Not Appear On The Statement

If this is the case, you must not reconcile the transaction. You should investigate whether the transaction you have entered is correct. If it is correct, the reason may be that your transaction date doesn't match with bank's transaction date.

Check if you can find the transaction on another date. If you still can't find the transaction, it may appear on a later statement (i.e. the transaction has not yet been cleared with the bank). If you think this is the case, you should leave the transaction as it is, and match it the following month.

If you suspect that a transaction on your account is false, this should be corrected before you continue with the reconciliation.

The Statement Contains a Transaction That Does Not Appear in My Account

Check if this is a valid transaction, and complain to the bank if it is not. If it is a valid transaction, it should be entered into your books before you continue with the reconciliation.

Saving an Incomplete Reconciliation

If you save a reconciliation that is not completely matched, the transactions that were not matched appear as unmatched transactions when you do your next reconciliation. These transactions can then be reconciled on the next statement.

You should consider carefully whether you want to save reconciliations that are not fully matched, because any unmatched transactions will have to be accounted for, by the end of your financial year at the very latest.

How Are Reconciliations Posted?

Bank Accounts

The transactions you have matched will be marked as matched, so that they will not appear on later reconciliations. Any interest or fees will be recorded in your books.

Credit Card Accounts

The transactions you have matched will be marked as matched, so that they will not appear on later reconciliations. Any interest or fees will be recorded in your books.

In addition, a credit card invoice will be created. All the transactions you have matched will be transferred to the Accounts Payable account for the credit card issuer, as a credit card invoice. This also includes any interest or fees. The outstanding balance on you credit card account will be reduced by the amount on the credit card invoice that is created. Later you will use the credit card invoice to pay for your credit card.

Merchant Accounts

The transactions you have matched will be marked as transferred, so that they will not appear on later reconciliations. Any merchant fees will be recorded in your books and the money will be transferred from the merchant account to the selected bank account.