USA General ledger doesn't tie in to the bank rec

[Beckyrec]

If the g/l does not tie in to the bank rec for one and I want to move on and come back to that month, how do I move on for now. Do I figure out the amount it is out for separately for each month and subtract those figures from the g/l ending balance I am working in? I really want to start for July and work my way back because I think some adjustments have been made along the way and it clears out.

 

[Steve-LevelUp]

This can be a complicated process that ultimately depends on how much activity is going on in the bank account and the GL.

One option is to take the current variance and leave this as an unreconciled item on the bank rec. Then, from that point forward, every bank rec should fully tie out, aside from this unchanging variance. There is no such thing as an unreconciled bank rec. If your Aug rec is also out, then this means you missed something and need to do it again. By plugging the July variance, you can make yourself have a clean $0 fully reconciled starting point. At some point, you can then go back and try to reconcile out that variance.

Feel free to ask anything further if you need some assistance.

 

[kirby]

Word to wise on this. Bank allows only a certain number of days after your statement date for you to report an error they made to them. After that date, no corrections. So find out your bank's policy to tell you how long you have before door slams shut.

 

[Beckyrec]

This can be a complicated process that ultimately depends on how much activity is going on in the bank account and the GL.

One option is to take the current variance and leave this as an unreconciled item on the bank rec. Then, from that point forward, every bank rec should fully tie out, aside from this unchanging variance. There is no such thing as an unreconciled bank rec. If your Aug rec is also out, then this means you missed something and need to do it again. By plugging the July variance, you can make yourself have a clean $0 fully reconciled starting point. At some point, you can then go back and try to reconcile out that variance.

Feel free to ask anything further if you need some assistance.

Thanks, so if the g/l is out 80k in January and 70k in February do I adjust February by 80k and March by 70k or March by 150k?

 

[Beckyrec]

Thanks, so if the g/l is out 80k in January and 70k in February do I adjust February by 80k and March by 70k or March by 150k? Also, should the current bank rec equal the change in the g/l for the corresponding period?

 

[Steve-LevelUp]

No, at this point, do not book an adjustment as you do not know what it is. As kirby mentioned, finding the transaction quickly is important (if it is fraud), however, if it isn't fraud, then it is only a reconciling item.

So, on your bank rec, you have your book balance, your bank balance, your outstanding checks, and your outstanding deposits. Right now, this leaves a variance. In your reconciliation at a line item that is just called "reconciling balance" which will bring this to $0. Then, every reconciliation after than should reconcile to $0. If it doesn't, then you missed something and need to re-verify the bank statement vs the books and compare transaction by transaction. every reconciliation should reconcile to $0. Anything other than $0 (after you have reset your starting position to $0) is a mistake and you need to do it again.

Once you have established a clean process for maintaining the reconciliation without needing to change the "plug", then when you have time, you can investigate that plug to determine what is causing the variance.