Reconcile your bank account

Solution Properties

Solution ID:

222001000100037

Last Modified Date:

Tue Nov 07 10:55:06 UTC 2023

Taxonomy Path:

Case category//How do I...//banking/reconciliation

Author:

[email protected]

Reconcile your bank account

Description

We recommend regularly reconciling your bank accounts. This makes sure your bank account balance matches your actual bank account and your reports are accurate.

Cause

Resolution

Before you start >

Make sure you have your bank statement handy as you'll need this.

Record other transactions

Before you reconcile, make sure you record all bank transactions using one of the following methods:

Reconciliation terms explained >

Here's an explanation of the terms used on the reconciliation page and how we use them:

Statement date - The end date of the bank statement you are reconciling.

Statement end balance - The closing balance is shown on the bank statement.

Total received and paid - This shows the total value of reconciled payments (money out) and receipts (money in). We update these amounts as you mark each transaction as reconciled.

Starting balance - The Starting Balance is the total of reconciled transactions up to the current statement date. This may not always match the closing balance of your previous reconciliation. It'll include reconciled errors or late entries from prior periods. Check the Starting Balance matches the opening balance on your bank statement. As long as your reconciled balance matches the closing balance on your bank statement, the reconciliation is successful.

Target balance - This is the same as your Statement End Balance. At the end of your reconciliation, this should match the Reconciled Balance.

Reconciled balance - This is a vital part of reconciliation. This is the total of reconciled transactions, plus the starting balance. The aim of any bank reconciliation is to make sure that the closing balance on your bank statement matches the Reconciled Balance in Sage Accounting. When you start, this will always match the starting balance. As you tick transactions, the reconciled balance updates. The reconciliation is finished when the reconciled balance matches the target balance and your bank statement.

Difference - When you start, this is the difference between the Starting Balance and the Statement End Balance. As you reconcile, the difference updates. The reconciliation is successful when the difference is zero.

For example: The starting balance is £1000.

You have two payments to reconcile for £500 and £300, making a total of £800. This reduces your bank balance to £200.

When you start the balances are:

Starting Balance =1000
Target Balance =200 (1000 -800).
Reconciled Balance =1000
Difference = -800

When you reconcile the first transaction, the reconciled balance is 500 and the difference is 300.

When you reconcile the second, the reconciled balance is 800, and the difference is zero.

How to reconcile >

The purpose of bank reconciliation is to make sure the transactions entered in Sage Accounting match the transactions on your bank statement. This makes sure that your bank balance is correct.

To do this, enter the closing balance from your bank statement. Then check all the transactions match the bank statement. If everything matches, the total of all reconciled transactions added to the starting balance will match the closing balance. To confirm this the difference will be zero.

Enter your statement details - It's important that you enter this information correctly. The information you enter here affects which transactions you see, and the target balance for the bank reconciliation.
Add interest and charges - It’s easy to add interest and charges right at the start of your reconciliation. Any interest or charges you add here are automatically marked as reconciled too.
Reconcile your transactions - You can reconcile all entries at once which may save time but can take longer to identify errors.

From Banking, open the bank account you want to reconcile.
Choose the Reconcile link.

Enter your statement details

Statement Date, enter the end date from your bank statement.
We only show transactions up to the statement date you enter. If transactions are missing, or you have too many transactions, check your statement date.
Statement End Balance - Enter the closing balance from your bank statement.
Reference - Add a reference such as the reference from your bank statement. This is optional.
Select Apply. This updates the reconciliation details below.

Add interest and charges

If you use a bank feed or import from bank statement, it's likely that your bank will have already imported any fees or charges already, so ignore this step.

Select Interest and Charges to enter the details.

Use the available options to record interest paid and received, as well as normal bank charges.

Enter an amount in the relevant box to record a Bank Charge, Interest Charge or Interest Earned as needed.
Enter the date the transaction took place in the Date box.
Select Save.

Reconcile your transactions

If you use a bank feed or import from your bank statement, your imported transactions are already selected as they have come from your bank account. Simply check the balances match in the Summary section at bottom.

To reconcile your transactions:

Check each transaction against your bank statement.
If the transaction matches, select the check in the Reconcile column.
To reconcile all transactions at once, select the drop-down arrow next to Interest and Charges and choose Reconcile All Entries.

As you reconcile each transaction, the reconciled balances update at the bottom of the screen.

Save as a draft >

You can save the reconciliation at any point. This is useful if you need to stop and come back to complete it later.

To save a reconciliation as a draft, select the drop-down arrow next to Finish and choose Save for later.

You must finish the draft reconciliation before you can start a new one. Select Discard if you need to delete and start the reconciliation again.

To come back to the saved reconciliation, just select the Reconcile link. The saved reconciliation opens automatically.

Un-reconcile transactions >

You cannot unreconcile transactions once you choose Finish.

You can unreconcile transactions when you save the reconciliation as a draft.

To unreconcile all transactions at once, select the drop-down arrow next to Interest and Charges and choose Unreconcile All Entries
To unreconcile each transaction separately, select the check box in the Reconcile column. This removes the tick and reconciles the transaction

Finish the reconciliation >

The reconciliation is complete once you have:

Reconciled all transactions
The reconciled balance matches the target balance
The difference is zero

Once the reconciliation is complete, choose Finish.

When you choose Finish:

We mark all transactions as reconciled so they are not included in another reconciliation
You cannot reverse or delete the reconciliation
You cannot unreconcile individual transactions

Find details of completed reconciliations from the Reconciliations tab.

Change reconciled transactions >

NOTE: Once you have saved your reconciliation, you can't delete the whole reconciliation. If you've made mistake, you'll need to use the following correction methods.

If you have made a mistake and need to edit a reconciled transaction, you can edit certain information, otherwise, delete the transaction and re-enter it.

You can edit the Reference, Description, and Ledger Account. Read more on Editing reconciled transactions Ireland or Editing reconciled tranasctions UK
To change to a date outside the reconciliation period, delete the transaction and re-enter it. Read more from Editing reconciled transactions Ireland or Editing reconciled tranasctions UK
If the bank account or amount is incorrect, delete the transaction and re-enter it. Read more from Delete bank transactionDelete bank transactions in the UK or Delete bank transactions in Ireland

You cannot delete a reconciled bank transfer, you need to reverse it instead. Read more from Reverse a bank transfer or cash deposit.

You cannot edit or delete any transactions that have been included on a VAT return. Read more from Correct transactions included on a VAT return in the UK or Correct transactions included on a VAT return in Ireland.

When the difference is not zero >

When the difference is not zero, this can be because:

The statement end date is not correct
The statement end balance is not correct
Some transactions have a different date to your bank account
The starting balance does not match the opening balance on your bank statement
A previous reconciliation was saved with a difference
A previous reconciliation was saved with the wrong date

For more details on how to resolve this read Why a bank account doesn't reconcile.

[BCB:299:UKI - Personal content block - Dane:ECB][BCB:307:UKI - Search override - Start UK / IE:ECB][BCB:276:UKI - hide back button:ECB]

Steps to duplicate