Bank Reconciliation Advice

[PamelaS]

I took over the bookkeeping at the beginning of February 2015. The previous bookkeeper never used the PCP bank reconciliation. She always did them by hand because she said she messed up some checks in the beginning which threw off the computer reconciliation and she did not know how to fix it. I would like to start doing the PCP reconciliation but am unsure of how to start (or even if I can). When I pull up the reconciliation screen, it shows items from years, back to 2010 when we started using the software. I started trying to find the items to check off to reconcile, but I could see that going through 5 years of transactions was going to take a while. Plus, I am guessing that the old items are going to throw off the reconciliation anyway? What is the best way for me to move forward? Thanks!

[NeilZ]

I took over the bookkeeping at the beginning of February 2015. The previous bookkeeper never used the PCP bank reconciliation. She always did them by hand because she said she messed up some checks in the beginning which threw off the computer reconciliation and she did not know how to fix it. I would like to start doing the PCP reconciliation but am unsure of how to start (or even if I can). When I pull up the reconciliation screen, it shows items from years, back to 2010 when we started using the software. I started trying to find the items to check off to reconcile, but I could see that going through 5 years of transactions was going to take a while. Plus, I am guessing that the old items are going to throw off the reconciliation anyway? What is the best way for me to move forward? Thanks!

You're probably going to have to clear out all those old transactions. What I would do is this:

1. Get the bank statement for the end of 2014.
2. Open the Reconcile Accounts function, and use the date of the statement and the ending balance as the entry data for the reconciliation.
3. Start clearing all the deposits and other items at the top of the Reconciliation Window from the beginning, when you get to the last deposit in 2014, you should either have cleared the deposits to the end, or had one or two left due to the date on the statement.
4. Do the same with the checks and other items at the bottom of that window. However, when you get to November 2014 start checking the NOVEMBER and December statements to make sure that you don't include any checks that have not yet cleared the bank. I've found that at the end of the year, there are always one or two that have a problem.

If you wind up with zero as the To Balance number, great !! If not, don't worry. Proceed to the Jan & Feb 2015 statements. If at the end of these statements you still have an issue. You will probably have to enter an adjustment.

This is not a problem, as you're basically trying to catch up and clear out any problems that the previous treasurer left you. Just fully document in the transaction why you are making this adjustment.

I don't recall seeing any other way to do this. That said, if some of our other users have another idea, please step in.

[Matt]

Here's another approach you could take. Use the last bank reconciliation that the previous bookkeeper did by hand as your starting point. Input the bank statement date and ending balance. Then, clear all deposits and checks up to the ending date on the bank statement except the ones shown as outstanding on the manual reconciliation. To expedite this process click on the date column to sort the deposits and checks by date. You should then be able to quickly click through and clear all the old line items and only need to go slower when you start getting close to the dates for the items that are still outstanding. When complete, the reconciliation will likely still be out of balance. Write down the out of balance amount and then click postpone to exit the reconciliation. Then, input an entry in Fund Accounting to debit or credit the checking account as needed with the offset to the Unrestricted Net Assets Account for the out of balance amount. Once the entry is posted go back into the reconciliation. Clear the posting you just input and you should be in balance. You can then do the reconciliation for the following months until you are caught up.

[wms7328]

I had the same problem when I took over some years ago. Mine was complicated by the fact the previous person didn't do any reconciliations either on PC or by hand. I spent about 40-50 hours trying to catch up on about 4 years worth of bank statements. After all that, I ended up with about $200 difference that I could never account for. I followed the advice to just enter a correcting transactions that made the reconciliation balance and put a note in the records on why this was done. You need to also make sure that your finance committee or governing body understands why this was done.

Good luck.