I have a client who has a current account and a deposit account, the latter with a substantial balance. In the current account he keeps a cleared balance of £5k and there are daily transfers to the deposit account.No other direct payments are made into the deposit account
When I prepare the bank reconciliation would it be best to add the current and deposit accounts together and reconcile to that figure or should I track all the transfers through the books ? Should not the transfers in the current and deposit accounts simply contra each other out.
Best would be to have an bank set up for each account.
The post the current account activity with the transfers between the two accounts posted as "transfers". They will then automatically appear in the deposit account which will then just need to be reconciled.
