SUMMARY: Step-by-step methods and techniques you can use when having difficulty reconciliating bank accounts with Clients & Profits X. It provides logical and clear steps on how to find out what’s wrong and how to correct the situation.

IMPORTANT: If the G/L has never balanced with the bank, the problem is out of the scope of this Tech Note. The out-of-balance needs to be corrected before a reconciliation can be saved.

To resolve an out-of-balance situation, a good report is the audit trail. Choose Accounting > General Ledger. Choose File > Print G/L Reports. Select Audit Trail. Print the report for your checking account for the entire year. Compare to your bank statements.    

Once you have resolved the out-of-balance situation between the G/L account balance and the bank statement, you are able to proceed with reconciling the C&P X bank reconciliation with the bank statement. Also as you continue to do the monthly bank reconciliations, there may be a month in which you don’t balance. In both situations, follow the steps below:

The first thing to do is to ensure that every item in the Bank Reconciliation window is correctly marked as cleared or outstanding. To start, you must have a report (with a zero difference) of your last Clients & Profits X bank reconciliation.

1) Choose Accounting > Checkbook.

2) Chose Edit > Checkbook Tools > Reconcile.

3) Add the G/L account number for the bank account you wish to reconcile

4) Add the ending bank statement date for the last bank statement you have.

5) Leave the ending statement balance blank.

6) Select the option to "clear all entries."

7) Click OK.

The Bank Reconciliation window opens. Every item is marked as cleared.

8) Click checkboxes for items still outstanding.

(The "X" is removed from a checkbox, thus identifying an item as outstanding.)

TIP: Be careful if you have old items that have not cleared the bank. Do not mark them as cleared just because most items for that date range have cleared.

(If you don't finish this process at one time, you can temporarily save this window. You won’t lose the work you've already done. When you want to continue, follow steps 1, 2, & 3.)

WARNING: DO NOT SELECT THE CHECKBOX TO "CLEAR ALL ENTRIES." If you do, your previous work will be lost.

9) When you finish, note the amount listed for the Difference, and save temporarily.

10) Follow steps 1 through 3 again, but this time, for the ending bank statement balance, add the amount that was listed for the Difference.

(The Bank Reconciliation window opens. The difference listed should now be zero.)

11) Print the Bank Reconciliation Worksheet report.

12) Click Save.

This bank reconciliation is saved as a reconciled one. The next bank statement you receive can be reconciled normally.  

But, there can be several possibilities why outstanding items are missing from, or erroneously include in, the bank reconciliation window:

• When the fiscal year is closed, outstanding items in the bank reconciliation are not carried forward to the new year's database.

• If this is a recently-started database, the old outstanding information may not be entered.

• If this database was converted from another version of Clients & Profits X, the outstanding items from the old database will not be listed.

• If importing payroll from another software program, verify that information was imported correctly. Check the payroll information against the Bank Reconciliation window for completeness and accuracy. Be certain that outstanding checks or charges are shown as outstanding.

• Voided checks must be cleared. (Each voided check has two parts– the check and the void.) Since both the check and the void are invalid, make sure they don't appear as outstanding.  

To adjust for outstanding items not appearing on the list:

Check outstanding items on your last reconciliation against the bank statement, and check the audit trail for outstanding items not appearing on the reconciliation. If you find any items that haven't cleared the bank and aren't on the outstanding list, then the ending balance entered in the first window needs adjustment. Subtract outstanding checks and add outstanding deposits to the ending balance.

Think of it this way–since you can't tell the computer that these items are outstanding, you adjust the statement ending balance as if the items had cleared the bank. This adjustment is no longer necessary in the month that items actually clear the bank.

Remember, you must leave the bank reconciliation window in order to adjust the statement balance in the first window, so save your work. Also, print a report showing the difference and the outstanding items, cleared items, or both. Use these reports to work from when you return to the bank reconciliation window.

If still unable to reconcile after following the above steps, then take these actions next:

Review all activity that updated the G/L account since the last time you reconciled.

All of these items should appear on your outstanding list.

Make sure you are checking only the transactions added AFTER you last reconciled.

The C&P X checkbook balance on your last balanced reconciliation PLUS these transactions should equal the C&P X checkbook balance on your reconciliation today.

If not yet reconciled, proceed further:

1) Choose Accounting > General Ledger.

2) Choose File > Print G/L Reports.

3) Select Audit Trail.

4) Add a date range from the day after your last balanced reconciliation (top right of printed reconciliation) to the date 12/31/2079 (to make sure it gets everything).

(Be sure to select date posted, not date added, from the pop-up menu. If the G/L was updated after the reconciliation was done that day, it may be necessary to print an audit trail for the day of the last balanced bank reconciliation.)  

5) Include all periods.

6) Add the G/L account number for your cash G/L account in both the “from account:” and “to account:” fields.

Concepts in Bank Reconciliation

Any item which is not outstanding must be marked as cleared. The bank reconciliation won’t consider items after they're cleared; it only calculates outstanding items. If an entry appearing in the bank reconciliation doesn't belong and isn't outstanding, then temporarily save the bank rec. Research the situation and take appropriate measures to resolve. (If you’re unsure about what to do, please call the Clients & Profits Helpdesk.)

Journal entries (JE#) listed in the bank reconciliation must match what the bank is showing for service charges, automatic payments, miscellaneous credits, bank card discounts, etc.

Compare the amounts on the statement and last month's outstanding list with the items in the bank reconciliation window. Banks can make mistakes and list a wrong amount. And it's possible for a user to add the wrong information on a hand-written check or JE.

The G/L balance is up-to-the minute, so it's important that any activity, debits and credits, added after the statement date is listed as outstanding.

If you have not used Client & Profits X to reconcile for a long period of time, remember the goal is to subtract outstanding items from the statement balance, and reconcile that amount to the checkbook. If you've been balancing manually and the G/L has been in balance with the bank, you'll choose the option to "clear all items" then mark as outstanding the items you would have listed manually.