Bank Reconciliation - The Book-keepers Forum (UK)

rachael-pink · Veteran Member

Bank Reconciliation

GJRobbins · Senior Member

Hi Rachel

Are they actual bank payments that have not yet cleared the bank?

Cash payments wont reconcile the bank as they should be entered as Petty Cash I presume??

You need use the appropriate 'bank' when entering payments, ie if they are cash then use code 1230

If you are making a provision for corporation tax then this is a journal adjustment, not a bank one - the only time CT will hit the bank is when it is physically paid.

You can easily edit these transactions via the file maintenance screen if you need ti change the 'bank' they were paid from.

If you have entered CT provisions as bank payments then you will need to delete them and create a journal for the required entry as DR Tax CR Tax Provision

Hope that helps

Thanks

rachael-pink · Veteran Member

Hi
None of them are actual bank payments.

I have put petty cash through and then at the end of the month I did a bank transfer from the main bank account to clear the petty cash account. I will amend the transactions - thank you.

rachael-pink · Veteran Member

Now amended all my transactions and there is nothing left to reconcile but it still says my balance is off by £1029.00 - arghhhh Any advice on why this would be? I have as I say amended all my petty cash and corrected my corp tax journal.

Stardoe · Guru

Hi Rachael,

When you say the balance is "off" by £1029.00, do you mean there is a difference in the difference box in the bank rec screen? Does this figure relate to any one particular transaction that you can see?

rachael-pink · Veteran Member

Hi
No it doesn't relate to one transaction.
It says
payments - 2043.23 receipts - 1743.23 matched balance - 4581.35 statement balance 3551.52 difference 1029.83

book balance - 4881.35

I have nothing left to match up. It did make a few mistakes which i corrected. They appeared but they all cancel each other out. Now left with £1029.83. They did have a lot of cash and petty cash transactions that didn't appear on the statement but I will need to do August soon and don't know what to do if I can't reconcile this - July month. What impact will it have on the rest of th emonths if I can't reconcile this one? I'm quite confused and don't know what to do!

Stardoe · Guru

OK, stupid question I know, but have you put the correct bank statement balance in the box at the top of the reconciliation screen? Also is your "last reconciled balance" correct? (i.e. did the bank reconcile with the Sage book balance at the end of June?)

As Jeremy said, cash and petty cash transactions will not appear on the bank statement as they are purely "cash" transactions, and you need to use the Petty Cash nominal in Sage, not the bank account nominal.

I'm afraid it may be a question of ticking off transactions to find the error. I always do this anyway as I am of the "old school" who does things methodically. I print off a nominal activity report of the bank (1200 or whatever it is in your Sage) include the b/f balance by ticking the relevant box and then ticking off the transactions against the bank statement. When you have finished the only items that should be outstanding on the nominal activity report (i.e. that you haven't ticked off) will be items that you have posted but which have not yet hit the bank account (unpresented cheques and deposits that have not yet gone through) and these will be the amounts left in your Sage bank rec screen.

Of course this method will only work if your last reconciled balance is correct. If this is not correct then you may have to use this method back from when it was correct. I always use this method and also do a manual bank rec... i.e. Bank statement balance - less unpresented cheques - plus unpresented deposits = Sage book balance. After this, the bank rec in Sage is a mere formality

If you can't reconcile this month then all your next months will be out as well.

Hope this helps a bit.

rachael-pink · Veteran Member

Hi
Thanks for your help. I finally managed to reconcile it - I couldn't understand it as I go through the bank statement with a fine tooth comb!
Sometimes I can't see the wood for the trees!
Thanks again

Stardoe · Guru

Hi Rachel,

Glad you sorted it, would you care to share what the problem was?

rachael-pink · Veteran Member

I had my balance incorrect and also had a mistake - something should of been £300 more than I had put it in as. So two mistakes! Thank you for your help. I do have another query though if you might be able to help me with.
The client spends a lot of cash - some of which I don't know where it comes from - they don't either, they had their first month so didn't run it with reciepts etc as they should of done. So now I have -£600 on petty cash. How can i resolve this?

Stardoe · Guru

rachael-pink wrote:

The client spends a lot of cash - some of which I don't know where it comes from - they don't either

Lol.....hmm...perhaps I shouldn't be laughing. So you have money going out of petty cash as expenditure, but nothing to show where this cash came from in the first place? Any chance of chasing them for the receipts? Is there a petty cash box? If so, is there any money left in it? (Need to establish whether there is a balance in petty cash or whether we need to write it off).

If they don't know where the money came from (maybe cash sales?), maybe it's their own personal money? If so you will need to credit Director's Loan account(s) and debit petty cash.

Edit: to put in quote so that you could tell what I was laughing at!!

-- Edited by Stardoe on Thursday 29th of August 2013 09:40:53 PM

rachael-pink · Veteran Member

Hi Stardoe you have beena star!

Thank you very much. Don't worry I laugh too - then I have a little cry! lol.
I think some of it was cash sales - they didn't have reciepts. I hav since tried to knock them into shape so this month should be easier! ha. Thank you for all your advice its been really helpful.

Stardoe · Guru

Hi Rachael,

No problem. If you want to borrow a large hammer....I have one handy