Bank Reconciliation

Introduction
A bank reconciliation is simply the process of matching the transactions from a bank account statement, provided by the bank, with the firms own accounting records, contained in ActionStep, at a particular point in time. Differences may occur for a variety of reasons such as: Checks (cheques) recorded in the firms accounts have not yet been presented to the bank, Bank fees appearing on the bank statement have not been recorded in the firms accounts, or Data entry errors. It is important to run bank reconciliations frequently (daily or weekly) so that discrepancies can be resolved quickly and to minimise the amount of work involved. This is especially important for firms that manage trust accounts.

Bank Reconciliations using ActionStep

Every account entry in ActionStep has a link to a reconciliation ID. If this link is empty then the entry is unreconciled. The process for performing a bank reconciliation is to enter the details from the bank statement (account number, date, and closing balance) and then matching the statement items to the unreconciled items in ActionStep. As you check off each item the amount is added or subtracted from the closing balance of the prior reconciliation until the reconciled balance matches the closing balance on the bank statement. ActionStep reconciles to the Closing Balance of the Bank Statement, which is much more robust than some other systems. ActionStep allows you to reconcile to a printed statement or to an electronic statement. If you have an electronic statement then you can import these into ActionStep and ActionStep will attempt to auto-match as many entries as it can, based on date, amount, and other criteria. You can then verify the auto-matches and manually match the remaining entries. Both methods will be explained below.

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Bank Reconciliation v1.0

Creating a New Bank Reconciliation

The bank reconciliation page can be accessed via Accounting->Banking->Reconcile.

Here you will see a list of completed and in-progress (un-reconciled) reconciliations. To create a new reconciliation click on the New Reconciliation button.

Enter the bank statement details and choose between a Printed or Electronic statement.

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Printed Statements
To reconcile from a printed statement simply go through each item on the printed statement and click on the checkbox next to the corresponding item in the ActionStep list until the amounts match.

As you check off items the Out By amount will adjust in real-time. Once all items have been matched it will change to a RECONCILE button which you click to save and close the reconciliation. All items are saved automatically as you check them off. If you close the reconciliation you can pick up where you left off at a later time by opening the reconciliation from the list.

What if I cant get it to Reconcile?

This probably means that there are either items on the bank statement that have not been entered into ActionStep (e.g. bank fees), or some amounts have been entered incorrectly into ActionStep. In either case you should close the bank rec (which will be automatically saved), then enter/correct the items in ActionStep and re-open the bank rec and continue from where you left off.

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Electronic Statements
Using electronic statements is essentially the same process as using a printed statement except that you will have screen with the uploaded bank entries to match against the ActionStep entries. ActionStep will also try to pre-match any entries based on same amounts, dates, and memo information. You will need to specify a file to upload and a corresponding format. Once uploaded ActionStep will do a sanity check on the file to make sure the closing balance and date ranges make sense. If not, then an error message will be displayed. Once uploaded you will see two views of the entries: ActionStep View (green)

Bank View (blue)

You can perform the matching from either view by selecting an item and then matching it to one or more entries in the other view.

Once all items are matched you click on the RECONCILE button to complete the reconciliation, just like Printed Statements.

Matching Reversals
The only trick with the electronic file matching is dealing with reversal entries that may not appear in the other view. For example you may issue a check and then void it, which will create an offsetting debit and credit in the ActionStep view that does not appear in the Bank view. Unlike the Printed Statement list, where you could simply check off both these items, in the Electronic Statement lists you have to match one view against the other. So in order to do this, either match the offsetting entries whilst matching another entry (as shown below), or leave these items unchecked and create a separate Printed statement reconciliation afterwards to check these items off.
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Electronic File Formats

Several standard formats are accepted such as QIF and OFX. However if your bank does not support these formats then you can create a custom CSV specification by mapping the CSV fields in your banks CSV file to standard fields inside ActionStep. To do this go to Admin->Accounting->Bank Import Specs.

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Bank Reconciliation v1.0