Hi R365 community,
I was curious what you recommend for best practices for Bank Reconciliation Frequency.
- Per Period
- Any combination of the above
1. We clear Bank Activity Daily.
a.This includes uploading all the bank activity and seeing what does not match.
b. We try to have invoices booked and marked as paid (for auto debit ACH) and have appropriate je's posted prior to bank upload so as many items match and clear as possible
2. After uploading Bank Activity we manually match any credit card or cash deposits as we can posting the appropriate adjustment. We work with managers to make sure cash mismatches are as minimal as possible.
3. All other transactions are cleared using Rules Applied, posting a JE to match the bank entry, creating an invoice payment to match an ADD or posted a bank Withdrawal or Bank Deposit directly from the Bank Activity Screen. We do not allow direct posting from Bank Activity for security reasons.
4. We then check the Undeposited Funds to make sure that any credit cards or cash deposits that should have hit the bank did hit the bank
5. After doing a good job clearing bank activity, the bank recs become pretty simple and we do them monthly, or for some high activity accounts weekly. There is typically no variance when you create the new Bank Rec as you have cleared all bank activity for the month already. The main work is to review the uncleared transactions to make sure that there are no stale transactions, problems where older items should have cleared, or postings that are mistakes and need to be reviewed.
6. If you do monthly recs, it may be a good idea to do a rec the week prior to closing. This way you can see if you have any problems that need to be resolved prior to the end of month and get a jump start on the month end close.
7 Remember, always check you undeposited funds. When you clear bank activity and do bank recs, you are making sure all cash transactions that flow through the bank hit the accounting system. You can still be missing deposits that should have made it to the bank but were posted to Undeposited Funds. Make sure you have no Undeposited Funds transactions outstanding that should have cleared the bank. ALSO, always check to make sure that at a given point in time, the total amount of Undeposited Funds ties to the balance sheet. There can be situations when this goes out of balance
Scott's answer is very thorough, and I don't have much to add.
We also do review activity daily, and are constantly "reconciling" the undeposited funds to make sure we don't have a balance sitting on the balance sheet.
I recommend running the Reconciliation Report after the rec is done and reviewing the uncleared transactions in your system. The majority of the transactions should be recent, and anything older than three months should be reviewed.
Also recommend running the GL-Reconciliation report. This report compares the GL Balance to the Ending Balance of your Bank Rec, + any uncleared transactions. This two should tie and the difference should be 0.
If you have any issues, feel free to reach out.
Synergy Restaurant Accounting