Bank Rec

Sage 50 Setting up Bank reconciliation

So the scenario is that you have inherited a Sage system and the previous user has not used the bank reconciliation (and may or may not have done a manual bank reconciliation in the past)

You need to pick a point in time to reconcile the two systems and move over.

If you don't have a bank reconciliation to work from then you need to do a bit of extra work to find out what transactions need to be brought forward.

For this example we are going to do our change over on 1st April and we have no previous bank reconciliation.

First you need to work out what items were outstanding on 1st April, i.e. things that had been entered in Sage before the first of April, but that appeared on the bank statement after the 1st of April. (If we had a Bank reconciliation then we would have this already)

So go into the sage bank reconciliation and set the date to 31ts march, this will hide all the transactions on 1st April and later.

Highlight the outstanding transactions and then swap your selection, so everything is selected except those transactions.

Now save the reconciliation, don't worry that the balance doesn't match at this stage (this should be the only time you ever match things off without them matching)

Go back into your bank reconciliation and make a note of the opening balance, I assume it will be different to the actual balance, this may have come about through errors in prior years, or perhaps there is something outstanding that you missed, a cheque from 3 years ago that never got cashed. (if you have a manual bank reconciliation then it should be the same)

Assuming the amount is small and/or you are happy to write it off you can make a bank payment (or receipt) to the Bad Debts account, if you want to take it in this year or, if you are sure it happened in previous years and would have been resolved by the accountant (perhaps your cut off date is your year end) then put it against 3200, without knowing where the difference came from, you should treat it as a write off and account for VAT only if it is in the VAT mans favour, probably best to liaise with your accountant on this if you find a significant sum.  Significant, in this context, means it is much more than a generous estimated cost of your time and your accountants time finding out where the difference had occurred and/or if it was vatable. 

The "sensible" option is to create an account in the P&L near bad debts called "Bank Rec difference to write off?" and leave it for the accountant to deal with at year end.

The sensible option has an extra handy feature, if you find something you missed later on, you can put it back with a bank receipt or payment back against that account (use the same vat/nominal codes as for the original transaction).