Bank Reconciliation help!

aaron0121

Hi Everyone,

I'm currently doing the bank reconciliation at work and I'm trying to get my head around it Currently
going through one clients bank statement for the year and I have no probs posting the credit entries
e.g. doing the bank transfers and receipts but when it comes to the debit entries how do I find out
which payment matches the invoice? E.g. On the bank statement it may say Direct Debit payment to
warburtons of £21.10 so I click into supplier, type this into the top section then below 2-3
invoices come up with the same amount, how do I find out which payment matches up to the
invoice?

Really appreciate any help or advice

Thanks

Aaron

ExcelAnt

Hiya,

The easiest way is to ring/email whoever paid you ask ask for a remittance. This will tell you which invoice has been paid

Not always practical however! The bulk of my early career was in bank rec in different formats and you eventually build up a logical sensible approach and develop "Onelike" skillz....anyway back to subject.

Direct debits: Never allocate a payment that occurs before an invoice (exceptions but this is a solid rule)
Eg DD on the 5th with an invoice dated the 12th.

Never part allocate payments unless you know you are meant to.
Eg invoice for 35.60 and a payment for 22.90. You could be missing an invoice.

Alot of bankrec is investigation and establishing facts, I liken it to being a detective! If done correctly it can be rewarding, if not everything gets messy very quickly! I would say a quick email to request remittance advice/a statement of account will resolve 99% of problems of allocation if something is in doubt.

Go forth and conquer Neo!

ExcelAnt

oh on another tack it is also a useful way of noting if there a duplicate invoices logged onto the system (although thats your AP dept controls failing if this occurs)

aaron0121

Really appreciate the advice Excel Ant

Also for some DD payments the amount is a couple of pennies off the actual invoice amount, so I reckon the
previous person before me has calculated the VAT wrong so would I need to get the a4 folders out the cupboard
with all the purchases invoices inside.

It's going to be a fun day today

ExcelAnt

One of two ways of dealing with minute differences, your way is prob best to establish why there are differences. And is accurate!

The other is to brush it under the carpet (send it to an "other" nominal code), it depends on time taken/reward acheived.

I once worked for a company doing bank rec on catering bank deposits (100's of outlets depositing money) I played snap. They considered anything more than £100 difference worth investigating IE unit declared £1500 deposit and £1460 hit the bank, we wrote it off the £40! was insane at times but there were bigger fish to fry so to speak

omega man

would you like an assistant aaron?I could do with a job

aaron0121

I'm very sorry Omega I don't have my own accounts practise, I work for one. It's very hard to find a job believe me
I've felt the rejections and constant no replies but you just can't give up!

aaron0121

Ok so I've been looking into the purchases invoices and LOL it's my fault :blushing: On one invoice it may say
net amount 277.32
VAT 55.50
However on SAGE net amount 277.32
VAT 55.46

So apparently I'm meant to manually type in the VAT amount of 55.50 but for all these invoices I've been sticking
to the SAGE VAT amount, so now I need to do a lot of maintenance.

The day just keeps on getting better and better

aaron0121

oops I messed up a DD payment :001_rolleyes:

I was meant to pay in full 26.27 from the bank ac/ref 1200 but I instead done from 1240 mortgage
account!

Can anybody please help me to reverse this :001_unsure:

aaron0121

Panic over sorted now I think lol

ExcelAnt

Wild!!!

Aye always check the gross in the top right, vat is never calculated perfectly, always a few pence out as systems round up/down differently.

Enjoy the weekend when you get there, sounds like you need it lol

aaron0121

lol thanks for all the advice

I've managed to post up most of the entries now, just need to finish it off on monday.