Do it, then review it! It is not good enough that you balance your brokerWOLF solution to your bank statement; you should also check it over and look for items that are out of place. A bank reconciliation is the cross checking of information that you have put into the system against the bank activity/statements for the same period. There are several things that the bank reconciliation may bring to light:
- Service charges, insufficient funds, interest items and other credit/debit memos, which should be entered as journal entries (F.1.1), or a ledger adjustment if against a trust or commission trust account (3.4/6.3).
- Items clearing for incorrect amounts– in some cases the bank may slip up on a decimal place or transpose two numbers. Contact the bank or use a J/E to correct.
- Deposits made to an incorrect bank account – since real estate offices often have 3 or more bank accounts sometimes cheques may get deposited into the wrong bank. (See the Deposits/Cheques Made To/From Wrong Bank tip sheet in the Help menu if this happens)
Do it, and then review it! It is not good enough that you balance your brokerWOLF solution to your bank statement; you should also check it over and look for items that are out of place such as...
- Stale dated cheques. Cheques with an issue date of more than six months ago are not going to clear the bank and need to be reversed. This should always be reviewed at year end since you cannot reverse a cheque from a closed period.
- Look for outstanding cheques or deposits which are transfers from one of your accounts to another. They should normally clear, so it might indicate a missing deposit or something allocated incorrectly.
- If you can’t find an item in brokerWOLF, use the search by “Amount” option in F.3.
- The Misc. screen in your bank reconciliation is to be used for temporary items in order to balance to the bank statement. Misc. items are most commonly used to account for bank errors until they are corrected in the next month. Items on the Misc. tab make no entries to the G/L, which means that items on this list will not be reflected in your company’s financial statements.
Keeping reconciliations up to date will ensure that these sorts of corrections happen in a timely manner. Often, if the bank has made the error they will correct the error so that you have minimal work to do to correct the error.
Notes:
- You can change the fields that are displayed on your bank reconciliations in option E.1.7.
- Use the Clear Cheque button to quickly clear cheques.
- Use the Clear Deposit button to clear all deposits for one day, or a date range.
- You do not need to close your bank reconciliations to post journal entries. After they are posted, click on the Refresh button.
- There is a Bank Reconciliation Video Tutorial available in the Support section of our website.
- No time for bank reconciliations? See what kinds of services of WOLFwatch team can can offer!
