The Bank Reconciliation process in MAS 90 consists of two parts: the Calculated Book Balance is reconciled to the Bank Statement, and the Calculated Book Balance is reconciled to the General Ledger. The first part is the actual user procedure of matching cleared checks, deposits, and bank charges to those recorded through MAS 90, clearing the items in the module. Reconciliation with the G/L is monitored by that little “Out of Balance” field in the upper right corner.
As noted in an earlier post, when the “Out of Balance” amount is zero, the Bank Reconciliation Register is run and we get the prompt to purge all cleared transactions. But what happens when we do not balance? Here are some tips to find the out of balance condition between the Bank Reconciliation and the General Ledger.
First, verify that the Beginning Balances in both modules are in agreement. Check the prior month’s calculated book balance from the Bank Reconciliation and make sure that it equals the prior month ending account balance in the G/L. If it does not, look for any entries that may have been entered in the prior month after the bank reconciliation had been performed – in particular, entries made via a general journal entry instead of through the Accounts Payable or Accounts Receivable modules.
Next, verify that all entries appear in both modules. Compare the Bank Recap Report against the General Ledger Detail Report to ensure that all entries in the G/L appear as transactions in the Bank Reconciliation module. Verify also that all posting dates in the G/L are the same as the Document Dates in Bank Rec.
If after confirming that our prior period balances were equal, and verifying that all transactions hit the Bank Rec, the next place to look would be at the Bank Rec transactions themselves. Was an adjustment entry posted to the Bank Rec that did not affect the G/L? Or perhaps a bank charge or interest payment was entered as a general journal entry and added to the Bank Rec as an adjustment – but in the wrong format.
The way that adjustments are handled in the Bank Reconciliation module is somewhat confusing to many MAS 90 users, and I’ve often seen instances where adjustments were made that caused out of balance situations. Rule of thumb when making an adjustment using the Bank Reconciliation module Check, Deposit, and Adjustment Entry feature:
- An Adjustment entered as a Positive value will DECREASE the bank balance. The adjustment will show in the Debit column of the Bank Reconciliation window. Enter an Adjustment as a positive value only if the transaction posted in the Credit column of the General Ledger entry.
- An Adjustment entered as a Negative value will INCREASE the bank balance and will show in the Credit column in the Bank Reconciliation window. Enter an Adjustment as a negative value when the transaction posted to the Debit column in the G/L entry.
- If using MAS 90 version 4.4 with Product Release 2 installed, you now have the option to post your bank adjustments to the G/L directly from the Bank Reconciliation module. It is even more important to follow the above rules to avoid posting incorrectly to the G/L.
Finally, there’s help available if you do have problems with your bank reconciliation. Your Sage reseller or consultant will always be willing to help you find the answer, or you can use the Sage online support knowledgebase to search for help. Here are the knowledgebase resolutions that I’ve used most often when helping my clients:
- Res ID#: 400824 – How to Resolve an Out of Balance in Bank Reconciliation
- Res ID#: 442141 – Transactions from Other Modules do not post to Bank Reconciliation
- Res ID#: 424880 – How ar etransactions posted to Bank Reconciliation in comparison to G/L
- Res ID#: 495597 – How do adjustments display in Bank Reconciliation
- Res ID#: 465043 – How the Beginning Balance is calculated on the Bank Recap Report (includes instructions on how to correct the Beginning Balance)
- Res ID#: 522143 – Ending Balance on the Bank Recap Report does not match the Current Balance
This concludes our series on the MAS 90 Bank Reconciliation module.