Introduction to and completing the reconciliation process
To reconcile bank accounts in Business Central with statements that are received from the bank, you must fill in the lines on the Bank Acc. Reconciliation page.
You can use bank reconciliations to compare open bank account ledger entries with bank statement transactions.
When you run the reconciliation batch, for each open bank account ledger entry, a reconciliation line is created. If all the suggested reconciliation lines match the bank statement lines for the corresponding date range, you can post the reconciliation.
In a typical business situation, the following differences can occur:
Transactions that are entered in the bank account in Business Central aren't on the bank statement.
Transactions on the bank statement aren't in Business Central.
Transactions in the bank account and on the bank statement correspond to one another but are recorded differently.
You must make sure that these differences are reconciled before you complete the reconciliation process.
Reconcile a bank account manually
To manually reconcile bank accounts with bank statements, follow these steps:
Select the Search for Page icon in the top-right corner of the page, enter Bank Account Reconciliations, and then select the related link.
Select the New action.
Select the bank account that you want to reconcile and then select OK.
On the General FastTab, fill in the required fields as described in the following list:
Bank Account No. - The bank account number to reconcile
Statement No. - The bank statement number to reconcile
Statement Date - The bank statement date
Balance Last Statement - Specifies the ending balance shown on the last bank statement, which was used in the last posted bank reconciliation for this bank account.
Statement Ending Balance – Specifies the ending balance shown on the bank's statement that you want to reconcile with the bank account.
On the action menu, select Process and then Suggest Lines.
Enter a starting date and ending date. All bank statement lines from this period will be suggested.
The Bank Statement Lines FastTab now displays the bank statement lines for the selected bank and period. By default, they are automatically applied with the open bank account ledger entries that are displayed in the Bank Account Ledger Entries FastTab.
Removing transactions that are not in the bank statement
Typically, the first step in reconciling differences is to remove the transactions that are entered in the program that don't appear on the bank statement. Some examples of these transactions are as follows:
Checks that have been sent to vendors but aren't presented to the bank yet.
Payments that are received and entered in the system but aren't deposited and cleared in your bank account.
To remove entries, on the Bank Statement Lines FastTab, select Show more options > Select More to select the entries that you need to remove. Next, select Show more options again and then select Delete Line.
As a result of these actions, Business Central automatically removes the application on the Bank Account Ledger Entries FastTab and the non-reconciled entries will appear on the next reconciliation.
Adding and posting transactions that are recorded by the bank
After you remove transactions that don't appear on the bank statement, add the lines for bank-related transactions, such as fees or interest. Because these transactions aren't in the program, the following steps must be performed:
Add the transactions manually to the bank reconciliation lines.
Transfer the line to a general journal.
Post the transactions by using a general journal.
Apply the posted general journal entry to the bank reconciliation line.
To add a transaction, follow these steps:
On the Bank Statement Lines FastTab, insert a new line.
Enter a date in the Transaction Date field.
Make sure that the Type is set to Bank Account Ledger Entry.
Enter a description.
Enter an amount in the Statement Amount field.
On the action menu, select Process and then Transfer to General Journal.
Select a general journal template and a general journal batch.
Select OK.
The program creates a new general journal line for the statement amount that you entered. Next, you have to select an account type and account number. The balancing account type is Bank Account with the number of the bank account that you're reconciling.
Selecting an account type and number means that if you now post the general journal, Business Central creates a new bank account ledger entry that is automatically included in the bank reconciliation and applied to the new bank statement line.
Record incorrect transaction amounts
If a bank statement contains an incorrect transaction, the following outcomes will occur:
The transaction can't be applied to a ledger entry.
The bank reconciliation can't be posted.
To resolve the incorrect bank statement line, follow these steps:
On the Bank Statement Lines FastTab, select the incorrect line.
In the Type field, select the drop-down list and then select Difference.
Select Yes to delete the application.
By removing the application, the ledger entry is still open when the bank reconciliation is posted, similar to the usual outstanding deposit entries.
If the Total Difference field is equal to the sum of all lines where the Type field is Difference, the bank reconciliation can be posted.
However, the bank reconciliation can't post until the amount for the reconciliation line is equal to the incorrect amount in the bank statement. You can correct this imbalance by using either of the following methods:
Adjust the statement amount to equal the amount on the bank statement.
Add a line for the difference between the two amounts.
To add a line for the difference between the two amounts, follow these steps:
Create a new line on the Bank Statement Lines FastTab.
Enter the transaction date.
In the Type field, select the drop-down list and the select Difference.
Enter a description.
Enter the statement amount.
With either method, there is still an open ledger entry that must be applied when the bank corrects the error, which typically occurs during the next bank reconciliation.
When you record transaction differences with this method, the advantage is that the correct G/L bank account balances are retained in the program.
The disadvantage of using this method is that, as soon as the reconciliation is posted, users can't determine whether the differences are resolved or if other errors in the bank statement are corrections of previous errors.