Hi I am to this forum so apologies if this has been covered before. I have started a job a few months back which includes accounts admin. I took over from a lady who is a book keeper and she comes in once a month to do VAT etc.
Yesterday after doing a bank reconciliation using SAGE Instant Accounts I noticed that after putting in the statement ending balance and matching off payments and receipts that although it balanced and the figure to the right of the screen was 0 that the figure in book balance did not match. I am very concerned I checked my notes and don't think I have done anything wrong but am starting to panic.
You've not done anything wrong, it's common for the balance on sage to not equal your bank statement balance.
Here's a scenario. Say you have a balance in sage of £10000 and a bank account balance of £10000. You have a cheque for ten pounds and you record it in sage. Sage will then show a balance of £10010 but your bank will only show £10000 until you actually present the cheque to the bank. You will still be able to reconcile the bank, and when you present the cheque that then will get reconciled.
-- Edited by Rhianrach on Sunday 20th of July 2014 05:55:31 PM
Hi thank you so much for your reply. But the problem isn't because a CHQ payment hasn't cleared. The end statement figure on the bank statement matched what is in SAGE and I could click reconcile because the figure was 0 so there was no difference to find.
The problem is that the figure on SAGE called the 'book balance' it is completely different to the statement ending balance (on SAGE and on the paper statement). When you click on the bank function that is that figure shown along side the current account (totally different from the ending statement balance from when I reconciled it?
I appreciate I probably do not make sense sorry.
Do you use SAGE Instant and if so do you have any idea what is wrong? Is the book balance figure supposed to match the bank statement? It looks as if it should?
I haven't used Sage for years, so this is just a guess, but are there any transactions posted after the statement date? I assume you reconciled all the transactions in Sage up to the statement date, which is why it came to zero. What happens if you go into the bank reconciliation and enter a statement date say a year into the future?
Doing a bank reconciliation isn't just about ticking off posted items against the statement. That's just the first stage. The reconciliation is explaining the difference between the bank statement and the ledger balance, so there must be some transactions that make up the difference.
The cheque was just an example of why you book balance wouldn't equal your statement balance, as stated by John, if you wanted to take the reconciliation further you would explain the difference between the two as part of the reconciliation.
Thank you both for your replies. I think it must be due to payments entered with the incorrect date as suggested. I am in tomorrow so will enter a random future date far into the future and see what it picks up.
It just made my blood run cold seeing the figure run into minus when the bank is clearly not. I was told that with SAGE Instant you don't have close at month end as I used to do many moons ago and that is when you usually see errors to do with dates and amounts. So I have no idea how many errors there will be or from how long ago, but hopefully I can sort it out.
Hi thank you so much for your reply. But the problem isn't because a CHQ payment hasn't cleared. The end statement figure on the bank statement matched what is in SAGE and I could click reconcile because the figure was 0 so there was no difference to find.
The problem is that the figure on SAGE called the 'book balance' it is completely different to the statement ending balance (on SAGE and on the paper statement). When you click on the bank function that is that figure shown along side the current account (totally different from the ending statement balance from when I reconciled it?
I appreciate I probably do not make sense sorry.
Do you use SAGE Instant and if so do you have any idea what is wrong? Is the book balance figure supposed to match the bank statement? It looks as if it should?
Hi Nicola,
I wonder if the following description of what is going on in the Sage reconcile screen might help.
Setting aside bank errors, everything that appears on a bank statement (we'll call this the Statement) should appear in your accounting records for the bank account (we'll call this the Cash Book). Sage's E-Reconcile functionality matches entries between the Statement (which must be imported from the bank) and the Cash Book. However, the Reconcile process to which you refer only shows Cash Book entries and allows you to record whether each entry has appeared on a Statement or not. The Statement, as such, is not "in Sage" anywhere. The sum of all matched entries at a particular date will give you the balance on your Statement, the sum of all matched and unmatched entries at that date will give you the Cash Book balance (the Book Balance). Only in cases where there are no unmatched items in the Cash Book will the Book Balance equal the Statement balance.
You can click reconcile when the total of what is matched equals the Statement balance. The box above the "Match >>>" button on the Reconcile screen shows the sum of the unmatched items in the Book Balance. This will be the difference between the Book Balance and the Statement balance.
Another way of looking at it is:
Cash Book Balance (Book Balance) = Matched Cash Book items total + Unmatched Cash Book items total
Statement Balance = Matched Cash Book items total
Therefore, substituting Statement Balance for Matched Cash Book items total, we have:
Cash Book Balance (Book Balance) = Statement Balance + Unmatched Cash Book items total
