B C D E G H I K L M N O P R S T U V W X
Re- Rec
Reco Recu
Reconciliation – PhreeSoft

February2014 / PhreeBooksR36RC3

bank recWhat is ‘Bank Rec.’:

One of the most important recurring tasks in any business, is to reconcile the bank(s). That is, to check that the bank transactions recorded in PhreeBooks match with the bank statements. You go through every transaction in your account and make sure you and the bank agree on the transaction. The bank balance recorded on PhreeBooks should agree with the bank statements.

You should reconcile the bank at least every month. Some businessmen record their payments immediately and check their bank accounts daily which will normally take only a few minutes, but means that the bank account balances shown in PhreeBooks are verified as correct once every day.

Some items, such as outstanding checks, won’t show up on your bank statement because the bank doesn’t know about them yet. Likewise, there may have been electronic transfers at the bank that you didn’t know about. Bringing all of these things into the open is what bank reconciliation is all about.

As part of the process of preparing year-end figures, prior to preparing the Annual Accounts, your Accountant will want confirmation that the bank balance figure held in the bookkeeping software matches the actual bank balance on the Bank Statement.

Common Reconciliation Problems:

When a Reconciliation won’t balance, these are some common reasons:

  • Obviously – posting mistakes.
  • Where transactions which had been reconciled have subsequently been AMENDED.
  • Transactions which had been reconciled have subsequently been DELETED.
  • A subsequent reconciliation has been made to the same date, and further transactions ADDED to the reconciled balance.
  • If a transaction is entered and mis-posted using an incorrect date (very common)
  • Where a prior Reconciliation that was out of balance was ‘adjusted’ with a Journal Entry to a suspense account, or written-off to the P&L.
  • The reconciliation is ‘out’ by TWICE the amount of a credit incorrectly posted as a debit, or vice versa.

Non-Reconciled Entries Carried Forward:

If an entry is not-reconciled (and saved) in a previous month, it will be carried forward into the next month. It will look out-of-place due to it’s incorrect date.

The solution – go back and reconcile in the correct month (don’t forget to ‘save’) and re-check that that month is still fully reconciled.

This is expected (and very useful) behaviour.

Undo Reconciliation:

User-contributed HowTo by

Here is what I would add as far as instructions for undoing a reconciliation:

I have had several occasions for undoing a reconciliation, both on Phreebooks and Quickbooks. Quickbooks contains a simple undo last reconciliation function which Phreebooks does not have.

The main reason to have to undo a reconciliation is that a journal entry gets edited and corrected from a past time that has already had a reconciliation done. There are other ways of handling the same problem, I am sure. I just don’t know what they are. I most recently found in Phreebooks, as I was going to do a new reconciliation I was checking the reconciliation for the previous accounting period and I noticed that there were items cleared that could not be deselected, but the reconciliation was not balanced to zero. I appeared that the reconciliation had been done, but something had thrown it off.

Undo Reconciliation

Go into your website database through phpMyAdmin or other database editor. You will log in to your server and phpMyAdmin should be found in the c-panel, at least on the servers I have used, which are virtual private servers.

Find the database file for reconciliation –recon

Delete the accounting period that needs to be redone (Ed. – How are you editing a file here, or are you deleting it?). I just deleted it, I think you would have to delete it. The DB file for reconciliation does not appear to have much detail, you could not edit an erroneous journal entry in that manner. If it is more than one accounting period past, you will need to probably need to delete the following reconciliations as well, since they will most likely be wrong.

That clears the record of the reconciliation. but if you go right back to your reconciliation, you will not be able to check again the items you had previously cleared.
(Ed. – I am failing to grasp this sentence )
Once the reconciliation file in the db has been deleted, the individual journal items which been cleared in the reconciliation will still at this point be marked as cleared.
The reconciliation file seems to mainly close the accounting period for that account. I am not sure what all the program functions of the reconciliation file are.

In order to do that you will still need to unflag each transaction from that reconciliation that had been previously flagged. To do this, just go to the general ledger manager and pull up the appropriate accounting period.

Each item that is marked cleared will need to be opened in edit and saved again. When you go to save again there will be warning about reposting the transaction. Click yes.

Now when you go to the reconciliation for the period and account in question, the boxes previously checked as cleared should be available again

In Summary:

BANKING > Account Reconciliation > Cash Account / Accounting Period
GENERAL LEDGER > Search > search with various filter criteria set

…   when used together, are a formidable combination to  successfully address ‘Account Reconciliation’.

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