Q&A of the Month--Reconciling With a Bank Statement

Q. What’s the best way to reconcile my checking accounts at the end of the month?

A. You can reconcile checks a couple of different ways depending on whether you clear your checks as you write them or clear them when the statement comes.

If you clear the checks as you write them the best report to run to reconcile is the Check Register/Check Reconciliation Report. This is straight-forward report asks for dates and account, but the biggest influence of what you get is the box that says “Date range uses check date.”
If you check the box it will show all checks written during the time period selected; any checks that fall outside the date range will either be reflected in the Beginning Balance or the Cleared After lines. This will give you a chronological list of cleared and un-cleared checks during the date range selected. If you choose not to check the box you will see just the checks that cleared during the date range, even though some these checks were likely written prior to the date range selected. Then at the bottom of the report you will see a list of all un-cleared checks. If you are clearing the checks as you write them then it really doesn't matter which way you run the report since the dates will be the same.

If you choose to wait until the account statement comes from your financial institution, then go to Input and select Clear Checks and Deposits and put in the date cleared for all checks and deposits on the statement. Now when you run the Check Register/Check Reconciliation Report you will see a difference in the two options for running the report. Either date range option can be used to reconcile your accounts, but running by Date Cleared (not checking the box) will give you all the transaction in the order you see them on your bank account statement along with a list of what still hasn't cleared. This makes it very easy to reconcile your statement.

Editor's note: Sarah Dixon, our Technical Service Manager and author of the Q&A section, will be demonstrating similar accounting processes in the "Farm Accounting 101" breakout session at the 2010 FBS User Conference in next month (see related articles).