Bank Reconciliation Process Snapshot

Overview

Client Type

Single-family, Multifamily Residential, Commercial Properties, HOAs and Industrial Properties.

Accounting Software

Yardi Voyager, Appfolio, MRI, RealPage, QuickBooks, Microsoft Dynamics.

Accounting System

Accruals and Cash based accounting system with bank reconciliation performed in software. All checks and payments (Auto Debit, ACH & BACS) processed in Accounts Payable module and all receipts processed are synced in General ledger. Also all transactions synced with bank are posted by Journal Entries.

Key Activities Done

Reconciling bank accounts – dealing with transactions not posted in the software, bank reconciliation discrepancies, bank reconciliation postings and reports.

Technology

Accounting Software accessed via web-login or remote desktop connection (for server-based versions). Customer Payment details downloaded from bank access and check images are downloaded from Yardi CheckScan or/are uploaded by site/corporate office to DropBox/Google Drive account. Bank statements will be accessed by View Only access or through a Drop-Box/Google Drive account.

Brief Description of Key Activities:

Bank Reconciliation

Bank reconciliation is updated in the reconciliation tab (based on client’s procedure, it is updated either by last date of the month or bank statement ending date). Once done, all transactions (Checks, Payment, Deposits, JEs etc.) appear in the bank reconciliation window. Every transaction is matched with the statement. Once done and when all transactions in the software matches with the bank statement then the difference will be zero. Bank balance and GL balance will vary if checks or deposits in GL have not cleared in the bank.

Transactions not posted in Bank Reconciliation

A few bank statement transactions like, Auto debit, direct deposit by customers, fund transfer etc. may not be in GL. These transactions are then posted in the GL (based on bank statement or as per records). In the absence of information, unposted transactions are recorded as “Bank reconciling items or Book reconciling items”. Once the transactions are posted correctly we then clear items posted in bank/book reconciling tab. This option is available in Yardi.

Bank Reconciliation Discrepancies & How to fix these

A Bank Reconciliation error happens when certain transaction like bank fees or interest from the statement that do not get entered in the current period of the reconciliation, or checks or deposits that are dated in the reconciliation period but posted in the following GL. To reconcile such transaction, the Bank Reconciliation Adjustment feature (Yardi) is used to create an adjustment to temporarily allow for discrepancies between the GL and the bank statement. the Bank Reconciliation Adjustment feature is used in cases where the bank statement is incorrect, or a book reconciling adjustment in cases where the GL is incorrect. Adjustments are cleared when the discrepancy has been resolved, usually in the next reconciliation period.

Resolving Bank Reconciliation Issues

Once the reconciliation process is completed, before final posting we review all un-cleared transactions in bank reconciliation window. Bank-Book Adjustment entries are posted for resolving minor unreconciled items due to rounding off etc. All un-cleared checks dated six moth old and all un-cleared deposits dated 15 days old are reviewed and discussed with the client before final posting is done. Older checks are voided and new checks issued, post client approval. In some clients, this step is handled by US end. Other reconciling items are researched thoroughly for resolution.

Bank Reconciliation Posting & Report Printing

Once the above steps are complete and bank reconciliation zeroed in software, we post the final reconciliations. A copy of each month’s reconciliation report is saved in the software for future reference.