Reconcile Bank Accounts
You perform bank reconciliation to make sure that your various business transactions and expenses are reflected correctly in the company books. You do this by comparing and matching entries in your internal bank accounts with bank transactions at your bank, and then posting the balances to your internal bank accounts to make totals available to finance managers. Bank reconciliation is also a practical way to discover and resolve missing payments and bookkeeping errors.
The following describes how to perform bank reconciliation with the Bank Acc. Reconciliation page.
You can also reconcile bank accounts on the Payment Reconciliation Journal page when you process payments. Any open bank account ledger entries related to the applied customer or vendor ledger entries will be closed when you choose the Post Payments and Reconcile Bank Account action. This automatically reconciles the bank account for the payments that you post with the journal. For more information, see Applying Payments Automatically and Reconciling Bank Accounts.
In the North American versions, you can also perform this work on the Bank Rec. Worksheet page, which is better suited for cheques and deposits but does not offer import of bank statement files. To use this page instead of the Bank Acc. Reconciliation page, deselect the Bank Recon. with Auto. Match field on the General Ledger Setup page. For more information, see Reconciling Bank Accounts under United States Local Functionality.
The lines on the Bank Acc. Reconciliation page are divided into two panes. The Bank Statement Lines pane shows either imported bank transactions or ledger entries with outstanding payments. The Bank Account Ledger Entries pane shows the ledger entries in the internal bank account.
Reconciling bank transactions with internal bank entries is referred to as matching. You can choose to perform matching automatically by using the Match Automatically function. Alternatively, you can manually select lines in both panes to link each bank statement line to one or more related bank account ledger entries, and then use the Match Manually function. The Applied check box is selected on lines where entries match. For more information, see Set Up Rules for Automatic Application of Payments.
If bank statement lines relate to cheque ledger entries, you cannot use the matching functions. Instead, you must choose the Apply Entries action, and then select the relevant cheque ledger entry to match the bank statement line with.
When the value in the Total Balance field in the Bank Statement Lines pane equals the value in the Balance To Reconcile field in the Bank Account Ledger Entries pane, you can choose the Post action. Any non-matched bank account ledger entries will remain on the page, indicating some discrepancy that you should resolve to reconcile the bank account.
Any lines that cannot be matched, indicated by a value in the Difference field, will remain on the Bank Acc. Reconciliation page after posting. They represent some kind of discrepancy that you must resolve before you can complete the bank account reconciliation. Typical business situations that may cause differences:
|A transaction in the internal bank account is not on the bank statement.||The bank transaction did not occur although a posting was made in Business Central.||Make the missing money transaction (or prompt a debitor to make it), and then reimport the bank statement file or enter the transaction manually.|
|A transaction on the bank statement does not exist as a document or journal line in Business Central.||A bank transaction was made without a corresponding posting in Business Central, for example a journal line posting for an expense.||Create and post the missing entry. For information on a quick way to initiate this, see To create missing ledger entries to match bank transactions with.|
|A transaction in the internal bank account corresponds to a bank transaction but some information is too different to give a match.||Information, such as the amount or the customer name, was entered differently in connection with the bank transaction or the internal posting.||Review the information, and then manually match the two. Optionally, correct the information mismatch.|
You must resolve the differences, for example by creating missing entries and correcting non-matching information, or by making missing money transactions, until the bank account reconciliation is completed and posted.
You can fill in the Bank Statement Lines pane on the Bank Acc. Reconciliation page in the following ways:
- Automatically, by using the Import Bank Statement function to fill in the Bank Statement Lines pane with bank transactions according to an imported file or stream provided by the bank.
- Manually, by using the Suggest Lines function to fill in the Bank Statement Lines pane according to invoices in Business Central that have outstanding payments.
To fill bank reconciliation lines by importing a bank statement
The Bank Statement Lines pane will be filled with bank transactions according to an imported file or stream provided by the bank.
To enable import of bank statements as bank feeds, you must first set up and enable the Envestnet Yodlee Bank Feed service, and then link your bank accounts to the related online bank accounts. For more information, see Set Up the Envestnet Yodlee Bank Feeds Service.
You can also import bank statement files in comma or semicolon delimited format (.CSV). Use the Set up a bank statement file format assisted setup to define bank statement import formats and attach the format to a bank account. You can then use these formats when you import bank statements in the Bank Account Reconciliation page.
- Choose the icon, enter Bank Account Reconciliation, and then choose the related link.
- Choose the New action.
- In the Bank Account No. field, select the relevant bank account. The bank account ledger entries that exist on the bank account appear in the Bank Account Ledger Entries pane.
- In the Statement Date field, enter the date of the statement from the bank.
- In the Statement Ending Balance field, enter the balance of the statement from the bank.
- If you have a bank statement file, choose the Import Bank Statement action.
- Locate the file, and then choose the Open button to import the bank transactions into the Bank Statement Lines pane on the Bank Acc. Reconciliation page.
To fill bank reconciliation lines with the Suggest Lines function
The Bank Statement Lines pane will be filled according to invoices in Business Central that have outstanding payments.
- On the Bank Acc. Reconciliation page, choose the Suggest Lines action.
- In the Starting Date field, enter the earliest posting date for the ledger entries to be reconciled.
- In the Ending Date field, enter the latest posting date for the ledger entries to be reconciled.
- Select the Include Cheques check box to any suggest cheque ledger entries instead of the corresponding bank account ledger entries.
- Choose the OK button.
To match bank statement lines with bank account ledger entries automatically
The Bank Acc. Reconciliation page offers automatic matching functionality based on a matching of text on a bank statement line (left pane) with text on one or more bank account ledger entries (right pane). Note that you can overwrite the suggested automatic matching, and you can choose to not use automatic matching at all. For more information, see To match bank statement lines with bank account ledger entries manually.
On the Bank Acc. Reconciliation page, choose the Match Automatically. The Match Bank Entries page opens.
In the Transaction Date Tolerance (Days) field, specify the span of days before and after the bank account ledger entry posting date within which the function will search for matching transaction dates in the bank statement.
If you enter 0 or leave the field blank, then the Match Automatically function will only search for matching transaction dates on the bank account ledger entry posting date.
Choose the OK button.
All bank statement lines and bank account ledger entries that can be matched change to green font, and the Applied check box is selected.
To remove a match, select the bank statement line, and then choose the Remove Match action.
To match bank statement lines with bank account ledger entries manually
On the Bank Acc. Reconciliation page, select a non-applied line in the Bank Statement Lines pane.
In the Bank Account Ledger Entries pane, select one or more banks account ledger entries that can be matched with the selected bank statement line. To choose multiple lines, press and hold the Ctrl key.
Choose the Match Manually action.
The selected bank statement line and the selected bank account ledger entries change to green font, and the Applied check box in the right pane is selected.
Repeat steps 1 through 3 for all bank statement lines that are not matched.
To remove a match, select the bank statement line, and then choose the Remove Match action.
To create missing ledger entries to match bank statement lines with
Sometimes a bank statement contain amounts for interest or fees charged. Such bank statement lines cannot be matched because no related ledger entries exist in Business Central. You must then post a journal line for each transaction to create a related ledger entry that it can be matched with.
On the Bank Acc. Reconciliation page, choose the Transfer to General Journal action.
On the Trans. Bank Rec. to Gen. Jnl. page, specify which general journal to use, and then choose the OK button.
The General Journal page opens containing new journal lines for any banks statement lines with missing ledger entries.
Complete the journal line with relevant information, such as the balancing account. For more information, see Working with General Journals.
To review the result of posting before you post, choose the Test Report action. The Bank Account Statement report opens and shows the same fields as at the header of the Bank Acc. Reconciliation page.
Choose the Post action.
When the entry is posted, proceed to match the bank statement line to it.
Refresh or reopen the Bank Acc. Reconciliation page. The new ledger entry will appear in the Bank Account Ledger Entries pane.
Match the bank statement line with the bank account ledger entry, either manually or automatically.
Undo a bank account reconciliation
If you discover a mistake in a posted bank reconciliation, you can use the Undo action on the Bank Acc. Statement page to correct the mistake. When you undo a posted bank reconciliation, the entries will be moved to the Bank Reconciliation page and marked as Open, meaning they are not reconciled. You can then correct the bank reconciliation and post it again.
In the North American version, to use the Undo feature for posted bank reconciliations and bank statements you must turn on the Bank Recon. with Auto-Match toggle on the General Ledger Setup page. The Undo feature is not available for bank statements posted from bank reconciliation worksheets.
Reusing the bank statement number
The bank statement number used for the new bank reconciliation is taken from the bank account as is the Balance Last Statement. You can change these values before you start a new bank reconciliation. However, when you create a new bank reconciliation, Business Central checks whether the statement number is already assigned to a posted bank statement. If the number is in use, but you want the new bank statement to use it instead, you can use the Change Statement No. action on the Bank Acct. Reconciliation page.
The following are a few examples of how to fix a mistake on a posted bank reconciliation with or without using the same statement number.
You did bank reconciliations for January, February, and March. The bank statement number was 100 for March. Later, you discover that March only included entries until the 30th, which means entries for the 31st are missing. So, you need to redo the bank reconciliation for March. In this case, we'll open the Bank Acc. Statement page, choose the statement for March, and then choose Undo.
The new bank reconciliation is given the statement number 101. To reassign the number 100, choose Change Statement No. and enter 100.
Remember to set the appropriate Statement ending date (in this example, that is March 31), and edit the Balance Last Statement field.
You did bank reconciliations for January, February, June, and July. You discover that February was incorrect. Let's assume it had statement number 100. As in the Example 1, you use the Undo and Change Statement No. actions to change the statement number as in example #1 above and you can now redo February bank reconciliation.
After you post the corrected bank reconciliation for February, on the corresponding Bank Account card, the Last Statement No. field will show 100, and the Balance Last Statement field will show the ending balance for the February statement.
If the next bank reconciliation you do is for March, Business Central will assign 101 as the statement number and give it the correct Balance Last Statement.
If the next bank reconciliation you do is for August, consider changing the values in the Last Statement No. and Balance Last Statement fields on the Bank Account card before you create the next bank reconciliation, or use the Change Statement No. action and also change the value in the "Balance Last Statement" field on the bank reconciliation page.
The statement number is important when you do bank reconciliations with imported CAMT files that contain statement numbers, or when you reconcile based on printed bank statements. If you just download a range of bank transactions from your online bank, the statement number is usually not important.
The Balance Last Statement is kept on the bank account to minimise mistakes when doing bank reconciliations, but it's also editable, allowing you to do your bank reconciliations in any order you want. This also means that if you undo a bank statement, the new ending balance might not be the balance last statement on the next bank statement. There's no feature that allows you to move a balance forward to all subsequent bank statements, so be aware of this when using Undo.