How to Perform a Bank Reconciliation

A bank reconciliation compares the balance the bank reports on your statement against the cash balance in your General Ledger, clears the transactions that have appeared on the statement, and explains any difference (such as outstanding checks or deposits in transit). NolaPro keeps every completed reconciliation in a searchable list, and each one can be opened as a printable report showing how the bank balance and the GL balance were brought into agreement. Use this workflow to review past reconciliations and to print the supporting report for any month.

Step 1: Find the Reconciliation You Want

Where: Ledger -> Bank Reconciliation

1) This page lists every reconciliation already recorded for the company. Narrow the list with the Account filter to show only one bank account.

2) Use Start Date and End Date to limit the list to reconciliations whose end date falls within a range.

3) Each row shows the ending balance, the difference between the expected and ending balance, the amount still to reconcile, the service charge, and interest earned. Account names carry a "(Deleted)" or "(Inactive)" tag when the underlying bank account has been removed or deactivated.

Step 2: Open and Print the Reconciliation Report

Where: Ledger → Bank Reconciliation (open from the table)

1) Click the end date link on the row you want; this opens the printable reconciliation report.

2) The summary section walks from the prior balance through additions and subtractions to the expected balance, then compares it to the bank ending balance and shows the difference, service charges, and per-category totals split between items that are on the statement and items still off the statement (deposits, ACH deposits, GL receipts, incoming transfers, checks, and GL payments).

3) It finishes with the adjusted bank balance, the GL balance, the adjusted GL balance, and the amount left to reconcile.

4) Detail sections below the summary list the individual transactions in each off-statement category so you can chase down anything still outstanding.

How the Totals Are Calculated

Two running totals drive the reconciliation, and the goal is to make them equal.

• Adjusted bank balance — starts from the bank statement ending balance, then adds the deposits, ACH deposits, GL receipts, and incoming transfers that you have recorded but that have not yet cleared the bank (plus any received money not yet placed on a deposit), and subtracts the checks and GL payments that have not yet cleared. In other words: ending bank balance + outstanding deposits and incoming transfers + undeposited receipts − outstanding (uncleared) checks and payments.
• GL (book) balance — the cash balance of the bank's General Ledger account from your posted transactions.
• Amount to Reconcile = adjusted bank balance − GL balance. The reconciliation is complete when this is $0; any non-zero figure is the difference you still need to explain (typically a transaction that is on one side but not the other).

When you record a service charge or interest earned on the reconciliation, NolaPro posts a matching General Ledger voucher automatically: interest earned debits the bank account and credits your Interest Income account, while a service charge debits your Bank Service Charges expense account and credits the bank account. (If you later change the amount, the prior voucher is reversed and a new one posted.) These voucher accounts come from your company's GL defaults, so they must be set before service charges or interest can post.

Notes

• The reconciliation report opens only by clicking the end date link in the table; it is not a standalone menu item.
• In the table, the service charge and interest earned amounts link directly to the matching GL voucher detail whenever a voucher has been posted for that amount.
• The report can include a Cost Code column for each detail section when the "Show Bank Rec Cost Codes" user preference is turned on, and a GL Category column when the "Show Bank Rec GL Categories" user preference is turned on.
• If the optional Bank Account Linking feature is enabled and the checking account has been linked to your bank, NolaPro pulls the bank's transactions for the statement period directly from the bank while you reconcile, so you can match each downloaded transaction to its NolaPro entry instead of clearing items by hand against a paper statement. Linking is set up per bank account, and on a hosted install it is available without any extra configuration.