Bank reconciliation helps ensure that what is in your books matches the statements you receive from your bank. It compares and matches entries in the bank accounts you’ve set up in Business Central with bank transactions at your bank. It is also a practical way to discover and resolve missing payments and bookkeeping errors.
In a typical business situation, the following differences can occur:
- Transactions that are entered into the bank account in Business Central aren’t on the bank statement.
- Transactions on the bank statement are not in Business Central.
- Transactions in the bank account and on the bank statement correspond to one another but are recorded differently.
You must make sure that these differences are reconciled and corrected before you complete the reconciliation process.
Processing a Bank Reconciliation
You can process a Bank Reconciliation in Business Central, using the following steps:
Under the Cash Management menu select Bank Account Reconciliations
In the Bank Account Reconciliations Page, click New.
Fill in the following details in the General section
- Bank Account No.: Select the bank account to be reconciled.
- Statement Date: enter the date on the bank account statement.
- Statement Ending Balance: Specifies the ending balance shown on the bank’s statement that you want to reconcile with the bank account.
The Statement No specifies the number of the bank account statement. This is auto filled in based on the Bank Account Card.
The Balance Last Statement specifies the ending balance shown on the last bank statement, which was used in the last posted bank reconciliation for this bank account. This is auto filled in.
Bank Account Ledger Entries tab shows the transactions in Business Central. These will auto-populate based on the Statement Date.
Generate Bank Statement Lines
The Bank Statement Lines will display the bank lines.
Reconciling transactions between bank statement and Business Central is called matching. There are two ways to match in Business Central:
- Suggest Lines function
- Import Bank Statement
Suggest Lines function
Click Suggest Lines to bring in all of your Bank Account Ledger Entries to the Bank Statement Lines portion of your screen for the time specified.
- On the Home tab, select Suggest Lines.
Define the details of the options and then click OK.
Bank Statement Lines will populate automatically.
Note: You can delete any lines not showing in your Bank Statement by selecting the Line/s and clicking Delete Line.
Import Bank Statement Files
On the Actions Tab, select Import Bank Statement under Bank action.
Once the Bank Account statement is reflected in the Reconciliation, next step is Matching. You can choose to match automatically or manually.
On the Matching Tab, choose Match Automatically.
Match Bank Entries window will open. Enter the Transaction Date Tolerance (Days). We recommend 1, 2 or 3 days.
If 2 is entered, the match function will search for matching transactions 2 days on either side of the date allowing for differences in dates between BC and the bank due to processing time.
If you enter 0 or leave the field blank, then the Match Automatically function will only search for matching transaction dates on the bank account ledger entry posting date.
All bank statement lines and bank account ledger entries that can be matched change to green font, and the Applied check box in the right pane is selected.
On Bank Statement Lines, the applied amount pertains to the amount that is applied on Bank Account Ledger Entries side.
- The amount on the Total Balance field will be the Bank Statement balance.
- The discrepancy of amount will be entered into the Total Difference. This needs to be zero to complete.
In the Bank Statement Lines section, select one or more bank lines you want to match.
In the Bank Account Ledger Entries section, select one or more lines to be matched.
Select Matching menu, choose Match Manually.
Repeat these steps until all bank statement lines are matched.
To help with matching you can toggle between Show All & Show Nonmatched, found under the Show menu.
If you need to remove a matched a line, you can select the lines on the left and right pane and select Remove Match under the Matching menu.
Any transaction in your Bank Statement and not in Business Central Bank ledger Entries such as Bank Charges should be posted in the system.
- To do this, either input the details in the Bank Statement Lines or select the relevant lines and choose Transfer to General Journal under the Home menu.
Fill in the Gen. Journal Template and Gen. Journal Batch then click OK.
The Gen. Journal will automatically open. Input the details before posting the entry.
Go back to the Bank Reconciliation page (be sure to refresh so that posted entries will reflect). These entries will auto apply.
Continue the above steps until all lines on the bank statement are matched and the Total Difference field at the bottom is also zero.
Once all details are okay, you can now post the Bank Reconciliation. Select Home menu, Post or Post and Print.
Post the Bank Reconciliation by clicking Post or Post and Print under the Posting Tab.
To view all posted Bank Reconciliations select Cash Management menu, Bank Acc. Statements
From here you can Print the Bank Statement or Undo