In the Bank Reconciliation process entries on the General Ledger bank account are compared to  Bank statement entries and any discrepancies are highlighted by the bank reconciliation report. General Ledger journals can be created for bank charges, direct payments and bank credits, eliminating the need for processing manual general journals. Control file TMSGL/BNK-UPDT must be flagged to activate Bank Reconciliation and bank file update.

The following transactions update the Bank reconciliation file.

Deposits

Deposits are keyed through Accounts Receivable. The batch number and or comments fields are held as a key for the bank reconciliation process and are dependent upon the type of deposits. Deposits come in essentially two forms.

• Those received through the mail and processed in Accounts Receivable and then sent for banking. The main key here is the batch number linking to the pre-numbered bank deposit book.
• Those received through the bank first and then processed through Accounts Receivable. The key in this case is generated by Iptor IP1 at the bank time of reading the bank statement. This number is then used as the batch number in Accounts Receivable.

The key required from the Accounts Receivable side to match to the bank transactions is made up of two parts.

• Group key – type of transactions (e.g. cheque number, deposit number, journal number etc.)
• Matching key – batch number

Bank statement

Bank statements can be uploaded automatically using various bank upload programs from the bank files provided or entered manually. The bank reconciliation report shows the reconciliation between the bank statement (coming from the bank) and the Accounts Receivable and Accounts Payable entries through the General Ledger bank account.

EFT and other direct deposits and payments

The electronic funds transfer and direct deposits appear on the bank statement. You as the customer need to liaise with the third party to determine a method of identifying these payments and or deposits. These can be in the form of pre-printed deposit books or a predetermined notation on your bank statement. By use of control files the system can read this reference/description and decide on the appropriate accounting treatment.

Payments such as bank charges and lease payments can be charges direct to predetermined general ledger accounts. Whilst deposits will remain unmatched until they are processed through accounts receivable.

Bank reconciliation can be manual or it can be automatic. The automatic reconciliation process allows automatic upload of Bank statement and it follows the same principles of reconciliation as the manual process. 

Manual bank reconciliation

Automatic bank reconciliation