Overview
The process of matching the balances in an office’s transactions for a bank account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate.
This demonstrates how to reconcile bank accounts, enter adjustments, deal with anomalies, import BAI or CSV files, generate reconciliation reports in Resware, and recognize the differences between two-way and three-way reconciliations.
Internal user roles
Admin/Internal User Roles
The following internal user roles are directly related to the reconciliation functionality in Resware. Each role is ledger-specific and can be enabled on all ledgers or only specific ledgers as needed by enabling the general access role and the ledger-specific role.
- Ledgers: Reconcile Bank Accounts – The user has access to add and edit account reconciliations.
- Ledgers: Reconcile Bank Accounts: Delete Reconciliation – The user has access to delete account reconciliations.
- Ledgers: View Reconciliations – The user has access to only view account reconciliations.
NOTE: The Copy Ledger Roles to All Ledgers in the Ledger-Specific Roles area will enable all the ledger-specific roles to all ledgers (except any ledger that has Don’t Copy when using ‘Copy Ledger Roles to All Ledger’ enabled).
Two-Way Compared to Three-Way Reconciliations in Resware
A two-way reconciliation only utilizes the bank’s ending balance to determine whether or not the reconciliation can be closed. Two-way reconciliations are used for the following Resware ledger types: receivables, property, bills, and sub-escrow invoice.
A three-way reconciliation compares the bank balance, book balance, and the escrow trial balance. Three-way reconciliations are required for all escrow funds and used for the following Resware ledger types: settlement, remittance, trust, recording fees, filing fees, clearing, sub-escrow, and holding.
Reconciliations
Accounting/Reconciliations
Reconcile Bank Accounts
- Select the Account from the drop-down to reconcile. A user will see any bank accounts that are associated with ledgers to which their roles allow access.
- Click New to create a reconciliation or Edit to open the current reconciliation.
- Reopen allows a user to reopen a closed reconciliation file as long as it is the most recent reconciliation.
- Delete allows a user with the user role for Ledgers: Reconcile Bank Accounts: Delete Reconciliation to delete the most recent reconciliation. It is recommended this role be limited to prevent users from accidentally deleting reconciliations. Deletion of reconciliations can not be reversed or restored.
- Report Across Selected allows a user to generate a reconciliation report that spans the date range of the two reconciliations selected. This may be useful for customers who reconcile and close daily, but want give their auditors a monthly report; Report Across Selected, if the first and last days of the month are selected, will generate a reconciliation report as if it were for the entire month.
Edit Reconciliation
- Enter the thru date in the drop-down.
- Enter the Ending Balance as it appears on the bank statement or banking website as it corresponds to the date entered above.
- Anomalies displays any potential issues with transactions in Resware. See below for further information.
- Click Edit Cleared Entries to view and clear transactions in Resware that have cleared the bank. See below for further information.
- All hyperlinks generate reports using the From and thru date range displayed.
- The Adjusted Bank Balance displays an adjusted bank balance accounting for transactions entered in Resware but have not yet cleared at the bank.
- The Adjusted Book Balance displays an adjusted book balance accounting for transactions that have occurred at the bank but have not been entered in Resware.
- The Adjusted Trial Balance displays the total of all the balances of the files on the account in the system as of the date of the reconciliation.
- The Adjusted Difference displays an amount when the reconciliation is not in balance. This must be at $0.00 before Resware will allow a user to close the reconciliation.
- Close Reconciliation closes the current reconciliation for the date range indicated. It is recommended that reconciliations in Resware are performed daily and closed monthly. For further information, see the Accounting Best Practices article and the Daily Reconciliation article available on the customer portal.
- Reconciliation Report allows a user to generate multiple reports that combine into one reconciliation report. See below for further information.
Edit Cleared Entries
This panel is split into four sections: Deposits, Incoming Wires, Checks, and Outgoing Wires. Transactions in Resware appear on this panel in the associated grid based on their issue date and are available to be marked as cleared to correspond to the activity at the bank. The following gives a brief explanation of the functionality on this panel:
- The top area displays the Account information, including the dates and balances from the Edit Reconciliation panel.
- The Cleared and Remaining totals in the top right corner show the user the net cleared items and the remaining total needed to match with the bank account balance, which is shown as the End Balance.
- Import and Exceptions are utilized when importing a BAI or CSV file from the bank to auto-clear activity in Resware. See below for further information.
- Hide Cleared and Hide Uncleared are available to visually reduce the number of entries displayed while searching for items to clear. These options can be selected and unselected at will and have no effect on the items’ cleared status.
- Each grid can be sorted by any column (except the Clear column) in ascending or descending order.
- The Void columns are for reference only. Voids are not done on this panel; they are done on the file or in the non-file ledger as applicable. Voided items are displayed until their void date has past.
- To clear an item, either click on the Clear checkbox on the item line or highlight the item and click the Clear option in the corresponding grid.
- To clear multiple items in the same grid, highlight the first item, hold Ctrl while selecting additional items (or Shift if selecting a range of items), then Click the Clear checkbox.
- Clicking on a Cleared date will pop-up a calendar and allow a user to change a date as needed.
- To unclear an item, click on the Clear checkbox again.
- To view information on an item, highlight the line and double-click on it or click the View option in the corresponding grid.
- Running totals are provided in each section and sub-totals for all incoming and outgoing sections to display the item count and totals for outstanding and cleared items.
- Save, Refresh is recommended when reconciling to ensure work is saved, especially for accounts with a lot of activity.
- Save, Close will save all work and close this panel.
- Reset will unclear any current activity that has not been previously saved. A pop-up will appear asking to verify selection.
- Close will close the panel. A pop-up will appear asking the user if changes are to be saved or not.
To reconcile the account with the bank:
- Clear all the items included on the bank’s activity for the day, either by importing the activity (BAI or CSV) or manually clearing each item.
- Click Save, Close.
- When returning to the Edit Reconciliation panel, make sure the Adjusted Difference is $0.00.
- Click Save.
- Repeat these steps each day of the month, changing the ending date and ending balance every day.
- When the last day of the month is balanced, click Close Reconciliation.
Adjusting Items on Bank Statements and Reconciliations
Adjusting items that are not related to files and need to be created to have reconciling items match the bank’s activity. These items will either be corrected on the next reconciliation or have been corrected within the current reconciliation.
If items related to files need to be adjusted, these adjustments should be done in the file. If something can be identified as being related to a file, e.g. a check was issued for $37.05 and cleared for $37.50, it should be fixed in the file.
- An item that will not be corrected by the bank (e.g. it’s not likely that the $.45 in the above example is going to be corrected) can be voided and reissued to match what happened at the bank and the “loss” amount would be reimbursed from the operating account.
- An item that will be corrected by the bank (e.g. if, in the example above, the check was issued for $37.05 and cleared for $3,705.00), the difference can be added to the Trans After Closing tab of the file and be issued to be used for reconciliation purposes. When the reimbursement from the bank happens, that would then also be added to the Trans After Closing tab of the file to use for reconciliation purposes and to put the file back balance.
Adjustments can be posted as either non-file transactions or as adjustments directly on the reconciliation. Please see the Accounting Best Practices article to determine which method best suits the company’s practices.
Identify items that are considered adjustments on bank activity. These are typically wires that were sent to the wrong account and need to be returned or fees that were charged to a settlement account that will either be refunded by the bank or paid by the operating account.
Non-file transactions (recommended method)
Accounting/Non-File Transactions
- Select the ledger that’s tied to the bank account that’s being reconciled.
- Click New Incoming or New Outgoing, depending on the type of transaction.
- Set the date to the date the transaction occurred.
- Select a partner.
- Select the Type. These are defined in Admin/Accounting/Transaction Types/(select the ledger)/Non-File Transactions
- Select the Method.
- Enter a dollar Amount.
- Enter a Memo. This will help identify the reason for the adjustment in case an auditor wants more information about it.
- Enter any other information that may be pertinent or necessary based on the type of transaction being entered.
- Click Save.
- When the adjustment is corrected, enter the correcting entry, which would typically be the opposite kind of transaction (e.g. if the original item was an outgoing transaction, the correcting entry would be an incoming transaction).
Reconciliation adjustments (alternate method)
- Edit the reconciliation for the bank account where the adjustment is needed.
- In the Adjustments section, select a Side, Category, and Type, based on the transaction.
- Enter a Ref Date and an Amount.
- The Bank Info, Book Info, and To Correct fields will be populated based on the Type selected. If this is not accurate, change these.
- Click Save.
The adjustment will show in its respective quadrant and be separated onto its own report as long as it’s associated with a reconciliation.
- When the adjustment is corrected, edit the current reconciliation, highlight the adjustment, and click Remove.
Reconciliation Anomalies
Admin/Reconciliations/Edit Reconciliation/Anomalies
This feature in Resware will list potential issues with balancing the reconciliation.
- Select the Ledger from the drop-down. If there is only one ledger associated with the bank account, it will be automatically selected.
- Select the Anomaly from the drop-down to list any potential issues.
- Adjustments whose sibling isn’t Voided/Stopped: This will list any adjustment for a voided or stopped receipt/disbursement where the receipt/disbursement is not listed as voided.
- Highlight the entry and click Fix to void the sibling entry. Please contact support for assistance if using Fix does not resolve this issue.
- Adjustments without a Void/Stop Pay: This will list any adjustments for voided or stopped receipts/disbursements that do not have an associated receipt or disbursement.
- If there are results, identify with which receipt or disbursement this adjustment should be associated.
- Highlight the entry and click Fix to delete the adjustment. Please contact support for assistance if using Fix does not resolve this issue.
- Received Dates in the Future on a Deposit: This will list any deposits that contain checks with a received date after the deposit date.
- If there are results, either the deposit date needs to be moved to a later date (Accounting/Deposits) or the checks need to be received earlier (File/Settlement/Postings).
- Transfers with different amounts: This will list any transfers between files whose amounts do not match.
- If there are results, void the file transfer and redo it.
- Transfers with different create/issue dates: This will list any transfers between files that do not have matching dates.
- If there are results, either the receipt or disbursement should be adjusted to occur on the same date.
- Voided items or Adjustments that have been Cleared: This will list any cleared receipts/disbursements that are also voided, stopped, or have adjustments.
- If there are results, determine if the item should be cleared or if it should be voided.
- Voided/Stopped before Issue/Create Date: This will list any receipts/disbursements that were voided/stopped before being created.
- If there are results, either the adjustment or the receipt/disbursement date needs to be adjusted.
- Voided transfers with different adjustment dates: This will list voided transfers that have mismatched adjustment dates.
- If there are results, either the receipt or disbursement adjustment should be changed to occur on the same date.
- Voids without an Adjustment: This will list any voided receipts/disbursements that do not have an associated adjustment.
- Highlight the entry and click Fix to un-void the voided entry, then return to the file and void the entry. Please contact support for assistance if this does not resolve the issue.
- Adjustments whose sibling isn’t Voided/Stopped: This will list any adjustment for a voided or stopped receipt/disbursement where the receipt/disbursement is not listed as voided.
- The Fix option will correct only the anomalies noted above; it does not work for all anomalies.
Import a BAI or CSV File
Admin/Accounting/Bank Accounts/Edit/Transaction Import File Format
To use the reconciliation functionality to import bank transactions, an import file format must be selected from the Transaction Import File Format drop-down. Resware currently supports the BAI file format, QuickBooks GFX file format, and over a dozen CSV file formats. If the file format needed is not listed in the drop-down, contact the bank associated with this account to request a sample file format, then contact support to request an enhancement and attach the sample provided. Most banks can supply a BAI format file.
Accounting/Reconciliations/Edit Reconciliations/Edit Cleared Entries
- Click on Import and locate the transaction import file received from the bank.
- Click Open. The file will import into Resware and return information about what was imported.
NOTE: All transactions that the importer recognized will be marked as cleared. The importer checks against the amount of the item, the check number (for checks), a date range* (for deposits and wires), and the confirmation number (for outgoing wires). If there weren’t any items in Resware that matched a transaction on the import file, if more than one item in Resware matched a transaction on the import file, or if there was only one matching item but it was found outside of the specified date rate, Resware considers those items to be exceptions and they will have to be manually cleared. Run the import with the same file only once, otherwise it will recognize subsequent imported items as duplicates which will appear as exceptions (this could be a lot of transactions depending on the size of the import file).
- Click on Exceptions for details on any imported transactions that did not match with Resware transactions. These entries will need to be reviewed and manually cleared once matched.
- The Exception Report can be generated and printed or exported as a PDF or excel format.
- Click Close to return to the Edit Cleared Entries panel.
NOTE: The date range mentioned above will use a default range to search in Resware for an exact match. This date range can be customized at Admin/General Setup/Resware Options/Accounting. For demonstration purposes, the default values are displayed below; these typically do not show and only the override values will display.
Reconciliation Reports
In addition to the hyperlinks on the Edit Reconciliation panel, the Reconciliation Report option will generate additional reports. This list is defaulted based on what’s set in Admin/Bank Accounts/Default Reconciliation Reports on the bank account that is being reconciled.
- Click Help to see the complete list of reports along with short descriptions.
- Use the Add, Remove, Move Up, and Move Down buttons to select and rearrange the reports as needed.
- If needed, click Reset to clear the items added, removed, or moved to return the list to its previous settings.
- Click Generate to create the report(s).
- Print or Export in a PDF or excel format.
Set default reconciliation reports on a bank account
Admin/Bank Accounts/Default Reconciliation Reports
Each bank account can have its own set of default reconciliation reports. Any reports added here will be defaulted on the reconciliation panel when generating reports.
- Click Default Reconciliation Reports to Add, Remove, Move Up, and Move Down buttons to select and rearrange the reports as needed.
FAQ
A Reconciliation out of balance
A reconciliation is out of balance if the Adjusted Difference on the Edit Reconciliation panel is not $0.00. Fix issues found in the Anomalies panel in the specific reconciliation. Determine all the ledgers that are associated with the bank account of the reconciliation, and recalculate the balance of each ledger. Accounting/Recalculate Ledgers