The Bank Account Reconciliation utility is a way for you to double-check your transactions that you have entered into Shepherd's Staff against what your bank has applied to your bank account. Shepherds Staff does this by taking the beginning balance from your bank statement and applying the transactions you mark as cleared to it, and when finished, it should equal the ending statement on your bank statement.
While it is important to run your Bank Account Reconciliation at the year-end, it's also important to note that it's very unlikely that all transactions you've entered for your previous fiscal year will be cleared at year-end. Because a check doesn't appear on your bank statement until someone cashes it, there can, and usually is a delay between the date you have written a check and have it posted for in Shepherd's Staff, and the date someone cashes it. The date someone cashes the check is what will appear on your bank statement, which will almost always be later than what date you wrote the check for in Shepherd's Staff. Knowing that, you do not have to have all transactions cleared before you perform your year-end.
Before you start your Bank Account Reconciliation, you should have a copy of the bank statement from the month you're trying to reconcile. We do recommend that you only try to reconcile one month at a time, as we have found this leads to the most accurate results. We also recommend you check your bank statement for any bank fees or interest accrued during the month and enter those in before starting your bank reconciliation.
To access the Bank Account Reconciliation, in the Finance module, click on Accounts, and choose "Bank Account Reconciliation". From here, follow the steps below to properly set up your Bank Account Reconciliation:
- Select the Bank Account you're reconciling. An asset account must be marked as a bank account in order for it to appear in your Bank Account Reconciliation.
- Enter the date of the oldest transaction on your bank statement. This will likely be before the beginning of the month you're reconciling, due to checks from previous months clearing in the current month. A good way to find out what your oldest transaction is on your bank statement is to find the lowest check number on your bank statement, and see what date you entered that into Shepherd's Staff. The date you entered that check into Shepherd's Staff is the date you should use in this step.
- Enter the date of the newest transaction on your bank statement. It's important to determine the newest transaction by the date you wrote it into Shepherd's Staff, not the date it cleared the bank.
- Enter the beginning balance from your bank statement.
- Enter the ending balance from your bank statement.
By following the steps above, when you click on the "Transactions to Clear" tab, you should only see transactions that fall between the dates you entered for steps 2 and 3. Also, any transactions that have been posted in a previous reconciliation will not appear in your transactions to clear.
Once we're in the "Transactions to Clear" tab, we're ready to start marking transactions as being cleared. Review your bank statement, and if you see a transaction on your bank statement that matches a transaction on your list of reconciled transactions, click the box in the Status column for that transaction, and that transaction will be marked as cleared.
The goal on the Transactions to clear screen is to get the "Difference" box to show $0.00 when you have cleared all your transactions. The "Difference" box represents the difference between your beginning balance and your ending balance. As you mark transactions as being cleared, they are applied to your beginning balance. So, when you mark a check as cleared, the amount of that check is taken away from your beginning balance. For a deposit, the amount is added to your beginning balance. In the case of a journal entry, if it's a positive entry, it is added to your beginning balance, and if it's a negative entry, it is subtracted from your beginning balance.
You can see the total of checks, deposits and journal entries marked as cleared on this reconciliation in the On Statement "Checks", "Deposits" and "Journals" windows respectively. You might also notice the "In Finance" numbers below that. These numbers have no direct effect on your reconciliation, but instead give you information about unreconciled transactions outside of your statement dates in the case of "Checks", "Journals", and "Deposits". As for the In Finance "Beginning Balance", this balance is the balance of the bank account as you see it on the accounts grid. the In Finance "Ending Balance" is the In Finance "Beginning Balance" less the In Finance "Checks", "Deposits" and "Journals".
If you're not finished working on your reconciliation, but you need to take a break and come back to it later, click the "Save" button at the bottom of the grid. This will save your reconciliation where you're at, and when you re-open the Bank Account Reconciliation, you can click on the "Transactions to Clear" tab and pick up right from where you left off.
The "Clear All", "Unclear All" and "Clear" buttons work to mark transactions as cleared or uncleared. Clicking "Clear All" will mark every transaction as being cleared. Be careful with this option, however, as typically, not every transaction that appears in your unreconciled transactions will be marked as cleared for a single month. Conversely, "Unclear All" will removed the cleared status from every transaction. Finally, the "Clear' button will mark the currently selected transaction as being cleared.
The "Print" button will let you print three different reports. "All transactions in the grid", "Cleared Transactions only", and "Uncleared Transactions only". This is the only place you can print these reports from, and once you have posted your reconciliation, you cannot get back into the same reconciliation to re-print these reports.
These reports will show the details of your reconciliation, including what bank account is being reconciled, the entered beginning balance, the total of cleared checks, deposits and journals, the entered ending balance, and the difference. You'll also see the in-finance total of Uncleared checks, deposits and journal entries through your entire finance module. The "All transactions" option will show every transaction that appears in your reconciliation, the "Cleared Transactions" option will only show the transactions you marked as cleared, and the "Uncleared Transactions" option will only show you the transactions on the reconciliation that have not been cleared. You can also check the "Sort by Document Number" to sort your transactions by their Check, Deposit and Journal entry number.
When you've reached a difference of 0, and you've marked off all the transactions on your bank statement as being cleared, and you've printed your Bank Account Reconciliation report, you can click post at the bottom right corner of the window, and your Bank Account Reconciliation will be posted. Once you have posted your reconciliation, any transactions that were marked as cleared will gain the status of cleared in their respective register, and will no longer be able to be edited or voided.