Overview
Reconciliation of accounts refers to the process of ensuring that two sets of records for the same account are in agreement. It is a standard accounting procedure to reconcile your accounts to ensure there is no discrepancy between your bank registers in the accounting system (say BQE CORE) and actual bank statements. This is done by making sure the balances match at the end of a particular accounting period. To ensure the reliability of the financial records, reconciliations must be performed for all balance sheet accounts (like gas, credit card, bank accounts, etc.) on a regular and ongoing basis. The general rule is that any account that is being maintained separately needs to be reconciled periodically to ensure correct balances across the two systems.
For instance, you get a monthly statement from the bank showing what transactions cleared since the last period. You can view those transactions in BQE CORE and check them off one by one so that the closing balance on the statement matches the closing balance in CORE. Some accounts are susceptible to things like service charges, interest earned or finance charges. As these are not directly tied to a single transaction, they are entered as General Journal entries. The same happens when the closing balance you are trying to reconcile does not match with the records in the system. You can either find and fix the issue, or you can perform an auto-adjustment to make a General Journal entry for the discrepancy amount.
Performing reconciliation in CORE is straightforward because most of the data is already in the registers. You can quickly enter or download transactions from your bank statement (say, ending balance, charges and interest), clear your checks and deposits, and print a report when you have successfully reconciled. CORE displays the breadcrumb trail to enhance accessibility and improve the visibility of pages within the Reconciliation screen. Click to watch this video on reconciling accounts in CORE.
Note: You can get a visual overview of this feature in CORE from the General Accounting flowchart.
Typically, accountants are the ones who reconcile accounts. CORE takes into account the transactional changes taking place in the company database during the reconciliation process. So, to avoid any discrepancy in reconciliation, it alerts you about the changes and prompts you to refresh. Please note that you cannot reconcile system accounts (with account numbers 12000, 12010, 3900 and 2200) and tax accounts (with account numbers 25100, 25200, 25300 and 25400). The only exception to this is the two system-defined accounts (3000- Opening Balance Equity and 2100- Payroll Liabilities), which are available for reconciliation.
How To
Create Business Activity Statements
Field Descriptions
| Field Name | Field Description |
|
Active Reconciliation > |
|
| Statement Date | To reconcile your CORE account with a corresponding statement, you must select the statement end date. |
| Beginning Balance |
Check this balance in CORE against the starting or opening balance on the statement. The first time you reconcile, the beginning balance is zero. Typically, Beginning Balance + Deposits - Payments and Withdrawals = Statement Balance |
| Statement Ending Balance |
This is the ending balance of the statement being reconciled, say of a bank or credit card statement. Statement balance resets to zero (0) if we cancel the reconciliation. Typically, Statement Balance = Beginning Balance + Deposits - Payments and Withdrawals Ideally, for reconciliation: Statement Balance = Cleared Balance |
| Service Charges |
While reconciling your bank accounts, you must provide details about any expenses incurred. Your bank statement lists bank service charges such as standard monthly charges. If you specify service charges during the reconciliation process, CORE creates a check transaction for this and no general journal entry. When reconciling trust fund accounts, CORE ignores this charge, even if you enter some amount here. |
| Date | Date on which the service charges were assessed. |
| Account | Account used to post service charges, if any. You should create an expense account for this, if not already done. |
| Interest Earned |
While reconciling your bank accounts, you must provide details about any income earned. Your bank statement lists the amount of interest earned on your account. If you select an account other than income or expense here, it creates a transfer or deposit entry in the Deposits section of Reconciliations. If you specify interest charges during the reconciliation process, CORE deposits that into the bank account and generates a deposit entry for it. When reconciling trust fund accounts, CORE ignores this charge, even if you enter some amount here. |
| Date | Date on which the interest was calculated. |
| Account | Account used to post service charges and interest earnings, if any. You should create an expense and income account for this, if not already done. |
| Finance Charge | While reconciling your accounts such as credit card or equity, you must provide details about any finance charges. This charge is specified on your credit card statement. |
| Date | Date on which the finance charges were assessed. |
| Account | Account used to post finance charges, if any. You should create an expense account for this, if not already done. |
| Active Reconciliations > Finalize Reconciliation | |
| Cleared Checks/Payments | Displays the total of checks and payments that have been cleared in the ongoing reconciliation. |
| Cleared Deposits/Credits |
Displays the total of deposits and credits that have been cleared in the ongoing reconciliation. |
| Cleared This Statement |
The difference between deposits/credits marked as cleared and checks/payments marked as cleared in the ongoing reconciliation. |
| CORE Cleared to Date/Cleared Balance |
Displays the running balance from all your cleared transactions. The Cleared Balance is zero when you begin a reconciliation session for the first time. For subsequent reconciliations, it displays the total from previously cleared transactions. Typically, it is the same as the Beginning Balance and is different only if there are any charges associated with the reconciliation. For bank accounts, the calculations are: Cleared Balance = Beginning Balance + Interest Charge - Service Charge + Deposits Cleared in the session - Payments Cleared in the session For credit cards, the calculations are: Cleared Balance = Beginning Balance + Finance Charge + Payments Cleared in the session Ideally, for reconciliation: Cleared Balance = Statement Balance |
| Difference Balance |
Initially, Difference Balance = Statement Balance - Beginning Balance However, when you start reconciling transactions, Difference Balance = Statement Balance - Cleared Balance If the difference is $0 and highlighted in green, everything is accurate and you are ready to reconcile the accounts. If the difference is not $0 and appears in red, you have to figure out the inaccuracy and correct it. In that case, you can choose to reconcile later. |
| Period |
Allows you to control the date range of entries that appear on the grid for reconciliation. It defaults to the As Of statement date, but can be changed. All the entries as well as the summary values at the top of the grid follow the selected period. |
| Reference No. | This can be the bill number or check number of the transaction. CORE sets the Check No./Ref No. for checks that are created against the bank service charges during account reconciliation as SERV_CHG. Such checks are treated as 'Printed' so that they do not show up in the Print Checks screen. |
| Checks/Payments | This list displays all the checks written and electronic payments made since your last reconciliation. It also includes checks that haven't yet been cleared by the bank since the last bank statement. You must select the check box for each transaction that has a matching transaction on the statement (make sure the amounts match). This grid is available for accounts such as checking and savings bank account. |
| Deposits/Credits | This list displays all the deposits and other credits received since your last reconciliation. You must select the check box for each transaction that has a matching transaction on the statement (make sure the amounts match). This grid is available for accounts such as checking and savings bank account. |
| Last Saved | You can see the timestamp, indicating when the screen was last updated. |
| Memo | This displays the transaction memo. If a memo exists for checks or deposits, an indicator and text appears in the Memo column. This memo gives extra context about the transactions without having to leave the screen. |
Reconcile Accounts
All the transactions that are on your bank statement are cleared transactions, meaning that missing transactions have not yet cleared. You can add any transactions you forgot by opening that account register and entering them there. When you return to the Reconciliations screen, the new transactions are automatically added and you can clear them here. Typically, the Cleared Balance is zero when you begin a reconciliation session for the first time. CORE automatically saves your data during the reconciliation process. If any changes are being made that affect the reconciliation process, CORE refreshes the screen and reloads the data, preserving any sorting done by you. If there is a discrepancy in your beginning balance, you will see the amount of the discrepancy and can access the Reconciliation Discrepancies report. Discrepancies most frequently occur when reconciled entries are deleted.
The goal of an account reconciliation is to make the Cleared Balance equal to the Statement Balance or as close as possible to it. If they remain different and you save the reconciliation, CORE prompts you to adjust the difference with a journal entry.
Note: Items that are automatically reconciled by bank feeds are already flagged as cleared.
To reconcile accounts, watch this video or follow these steps:
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Open the Reconciliations screen from the side menu > Accounting > Chart of Accounts.
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Select an account, say bank account, from the Account drop-down that you want to reconcile.
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Click Reconcile Account on the top-right. It displays Continue Reconciliation instead of Reconcile Account if the selected account has draft reconciliations associated with it.
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On the Active Reconciliation dialog, enter the required information. Check Field Descriptions above for details.
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Statement Date: statement's end date.
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Statement Ending Balance: ending balance of the statement
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Service Charges, Date and Account
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Interest Earned, Date and Account
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Click Continue.
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On the Active Reconciliations screen, you can sort the columns by date or amount to save time in searching for records for reconciliation. You can also select the relevant date range from the Period drop-down. Check Field Descriptions above for details.
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Typically, the Cleared Balance is zero when you begin a reconciliation session for the first time. You can view the cleared transactions in CORE and check them off one by one by checking their Clear box against Checks/Payments so that the ending balance (cleared balance) in CORE is the same as the statement balance. Select the deposits or credits to clear, if any. Check Field Descriptions above for details.
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Next, click Finalize Reconciliation. If the Difference Balance is $0, your accounts are reconciled.
Note: CORE auto-saves your reconciliation details as a draft. You can click Continue Later to cancel the process and resume it later. -
If there is a discrepancy between the transactions in CORE and your statement balance, then CORE prompts you to choose one of the options:
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Auto Adjust: You can fix the issue by selecting Auto Adjust to force CORE to create a journal entry for the difference. The G/L entry created for the difference either debits or credits the Reconciliation Discrepancies - 66900 system account. You can set the Adjustment Date, which is used as the date of the created journal entry.
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Cancel: You can use this option to return to the screen without making any adjustments. You can then fix the issue manually by opening that account register and entering the transaction there. When you return to Active Reconciliations, the new transaction is automatically added, and you can clear it here.
Note: If needed, you can click Edit anytime to go back to the Active Reconciliation dialog and make changes there.
Manage Reconciliations
To view the reconciliation history of an account, watch this video or follow these steps:
- Open the Reconciliations screen from the side menu > Accounting > Chart of Accounts.
- Select an account from the Account drop-down whose history you want to view. You can see all the previous reconciliations of the selected account. Draft reconciliations are not displayed here.
Note: When the selected account has a draft reconciliation, CORE prompts you to continue reconciling that account first. - You can click the row-action menu
to select Detailed, Summarized or Discrepancy reconciliation reports to run.
- If needed, you can undo the last reconciliation by clicking Actions > Undo. Undoing a reconciliation affects your account's beginning balance and also removes the cleared status of all the transactions and charges.
- You can also click Reconcile Account on the top-right if you decide to reconcile the accounts. It displays Continue Reconciliation instead of Reconcile Account if the selected account has draft reconciliations associated with it.
Create Business Activity Statements
Australian business owners need the ability to run a Business Activity Statement (BAS) to report their taxes to the Australian Tax Office. The Business Activity Statements screen in CORE allows you to create and review a draft BAS report where values are pulled automatically by CORE, but you can enter any payroll numbers that are not tracked by it. You can also review your previously completed BAS reports and export them as PDF, Excel or CSV.
To create BAS, watch this video or follow these steps:
- Open the Reconciliations screen from the side menu > Accounting > Chart of Accounts.
- In the list view, click More > Prepare Activity Statement (BAS).
- On the Business Activity Statements screen, click Create New on the top-right. Check Business Activity Statements for details.
- Choose the Save option: Save as Final or Save as Draft.
View Reports
To view a report, watch this video or follow these steps:
- Open the Reconciliations screen from the side menu > Accounting > Chart of Accounts.
- In the list view, click More > View Reports.
- Select a report from the Report List dialog. It opens in the viewer.
- Preview the report and then choose to export or print it.
You can also check the detailed video on running and managing reports in CORE.
Mark Screen as Favorite
You can mark or flag the most-often used and important screens in CORE as your favorites up to a maximum of ten. These favorite screens then display separately on the side menu under the Favorites list. You can manage all your favorite screens in CORE from User Settings.
To mark this screen as your favorite, watch this video or follow these steps:
- Open the Reconciliations screen from the side menu > Accounting > Chart of Accounts.
- In the list view, click
on the top-right.
- You can access this screen from the side menu under Favorites.
You can also check the detailed video on marking screens as favorite in CORE.