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Bank Reconciliation

  • 100views
  • February 6, 2024

Bank Reconciliation

A Bank Reconciliation entry is used to match BizCentric account statements with your bank account statements.

If you are receiving payments or making payments via cheques, the bank statements will not accurately match the dates of your entry, this is because the bank usually takes time to “clear” these payments. Also, you may have mailed a cheque to your Supplier, and it may be a few days before it is received and deposited by the Supplier.

In BizCentric you can synchronize your bank statements and your Journal Entries using the transaction dates.

1. What is a Bank Reconciliation Statement?

The Bank Reconciliation Report highlights the variance between the bank balance reflected in an organization’s bank statement, as supplied by the bank, and the amount displayed in the company’s Chart of Accounts.

Within the report, verify whether the ‘Balance as per bank’ field aligns with the Bank Account Statement. A match indicates that the Clearance Date is accurately updated for all bank entries. Conversely, a discrepancy suggests that some bank entries lack updated Clearance Dates.

To access Bank Reconciliation, go to:

Home > Accounting > Banking and Payments > Update Bank Transaction Date

2. How to Update Bank Transaction Dates

  • Navigate to the Bank Clearance section.
  • Choose your Bank Account.
  • Specify a date range from and to.
  • You have the option to include reconciled entries and POS transactions.
  • Click the Get Payment Entries button.
  • This will retrieve all entries of “Bank Voucher” type.
  • For each entry, update the Clearance Date field located in the rightmost column. Then, click on the Update Clearance Date button.
  • This process ensures synchronization between your bank statements and entries within the system.

3. Types of reconciliation tools

BizCentric has two reconciliation tools:

  1. A manual reconciliation tool allowing to set clearance dates against payment entries, sales invoice payments or journal entries.
  2. A semi-automatic reconciliation tool allowing to clear bank transactions against payment entries, sales, and purchase invoices payments, journal entries or expense claims.

3.1 Manual Bank Reconciliation Tool

To view this report, go to:

Accounts > Banking and Payments > Bank Reconciliation Statement

Within the report, verify whether the ‘Balance as per bank’ field aligns with the Bank Account Statement. If there is a match, it indicates that the Clearance Date is accurately updated for all bank entries. Conversely, if there is a discrepancy, it suggests that the Clearance Date for the bank entries has not been updated yet.

3.2 Semi-automatic Bank Reconciliation Tool

It is a two-step process:

  1. Add Bank Transactions into BizCentric via Bank Statement Import or Bank Account Synchronization
  2. Reconcile the Bank Statement

3.2.1 Bank Statement Import

  • Download a bank statement from your bank’s website Make sure you have at least the date, the debit/credit and the currency on every row of your bank statement. To upload your Bank Statement, go to:

    Accounting > Bank Statement > Bank Statement Import

    Or simply search for Bank Statement Import in the bar.

  • Choose your Company and Bank Account.
  • Click Save.
  • Attach the Bank Statement.
  • Click on Map Columns to establish the mapping between columns in the uploaded Bank Statement and the Bank Transaction DocType.
  • Initiate the import process by clicking Start Import. Bank Transactions will be generated through a background job, with progress displayed here.
  • The mapping performed is stored in the Bank document associated with the corresponding Bank Account. In subsequent uploads, the mapping is retrieved from here, but users can modify it if necessary. Any changes made to the mapping are also updated in the Bank document.

3.2.2 Bank Account Synchronization

You can use Plaid (see Plaid Integrations page) to automatically synchronize your bank account with BizCentric. All your bank transactions will be automatically imported into BizCentric.

3.2.3 Automatic Party Matching for Bank Transactions

You can optionally enable automatic party matching so that a party is auto set (if matched) in the Bank Transaction. To enable this, go to:

Accounts Settings > Banking > Enable Automatic Party Matching

You can also activate the option for Enable Fuzzy Matching, where the Party Name/Description in the Bank Transaction is approximately matched with all the parties in the system. This is beneficial when the party’s Bank Account is not registered in the system.

Once enabled, party matching will occur automatically upon submitting the Bank Transaction.

To facilitate mapping, you can conveniently store Customer, Supplier, and Employee bank data by creating a Bank Account for individual parties. After submission, the Party Type and Party in the Bank Transaction will be automatically set and can be corrected or updated as needed.

3.2.4 Reconcile the Bank Statement

Once all your bank transactions are imported into BizCentric, you can reconcile them with your existing vouchers. Go to:

Accounting > Bank Statement > Bank Reconciliation Tool

Or simply search for Bank Reconciliation Tool in the bar.

  • Choose your Company, Bank Account, Bank Statement Start and End Date.
  • Ensure that the opening balance in BizCentric corresponds with the opening balance in your Bank Statement.
  • Input the Closing Balance of the Bank Statement.
  • Saving the document will display matching bank transactions.
  • The ultimate objective of Bank Reconciliation is to reconcile the difference amount to zero (indicated in green) by either matching it to an existing voucher or creating a new one.
  • For bank transactions present in the Bank Statement without a clearance date, click on the Actions Button to Match/Create Vouchers.
  • For matching, select ‘Match Against Voucher’ under ‘Action’. Relevant vouchers related to the transaction will be shown, ranked based on the maximum number of matched fields. You can match one or multiple vouchers against the same Bank Transaction using checkboxes.
  • To create a new voucher, opt for ‘Create Voucher’ under ‘Action’, then choose the document type. Fill in the necessary details that were not available in the Bank Transaction. Submitting the form will generate the corresponding voucher and update its clearance date.
  • You also have the option to update Bank Transactions. Updating a Bank Transaction can aid BizCentric in finding better matches. To update a Bank Transaction, select ‘Update Bank Transaction’ under ‘Action’, fill in the required details, and click Submit to save the changes.