Bank Reconciliation in MS Dynamics GP 2010

OVERVIEW AND SETUP PROCEDURES

Bank Reconciliation is used for;

   * Discuss the features and benefits available in Bank Reconciliation

   * Use the setup windows to personalize Bank Reconciliation for your business

   * Set up checkbooks in Bank Reconciliation

   * Convert existing checkbooks to begin using Bank Reconciliation

Please note that, If Bank Reconciliation is started after using other modules, complete following tasks before entering information in Bank Reconciliation Setup and other Bank Reconciliation windows:

·         Post all transactions in other modules so the balance of the cash account assigned to each checkbook is up-to-date when registering the Bank Reconciliation module.

·         Reconcile existing checkbooks against the previous system to decrease the number of outstanding checks and transactions to enter, and to reflect accurate balances when you begin using Bank Reconciliation.

NOTE: If Multicurrency features are being used, and US Dollars is specified as the functional currency for the company, and a Canadian Dollar checkbook and a Euro checkbook exist along with US Dollar checkbooks, funds cannot be transferred between the Canadian and Euro checkbooks only the US and Canadian and US and Euro checkbooks.

NOTE: If checkbooks are set up in Microsoft Dynamics GP prior to using Bank Reconciliation for reconciliation purposes, consider setting up completely new Checkbook IDs when activating Bank Reconciliation for this purpose. This way, transactions that were entered in other modules do not need to be posted before using Bank Reconciliation. If this is done, inactivate the current checkbooks and then, eventually delete them.

User-Defined Fields

User-Defined fields track additional information related to checkbooks. For checkbook Type in the User-Defined 1 field. Checkbook Type appears as a field title in the Checkbook Maintenance window to further identify the type of checkbook.

The first user-defined field can be used as a sorting option on reports. The User- Defined 2 field tracks additional information about each checkbook; however, it is not a sorting option on reports, unless it is defined as a sort using Report Writer.

NOTE: Once the Bank Reconciliation module is set up to be used in Microsoft Dynamics GP, verify that the Customer Account Maintenance, Vendor Account Maintenance, and Employee Maintenance windows are set up to use the cash account from the checkbook. If you do use the cash account from the checkbook when posting, it is very difficult to reconcile the current balance in the Checkbook Maintenance window with a cash account's General Ledger balance.

NOTE: If you are not allowing duplicate checks in Payables Management, and the system has assigned all possible unique numbers, a message is generated indicating that a unique document number is not available.

NOTE: Duplicate deposit numbers are not allowed. If all unique deposit numbers have been used when attempting to enter a deposit, check the Checkbook Maintenance window because a unique document number is unavailable.

Inactivating Checkbook

A checkbook can be inactivated at any time. To close a checking account and prohibit writing new checks or adding receipts to the checkbook before reconciliation, inactivate the checkbook.

If a checkbook is inactive, you can still:

·         Post transactions entered in any module (no new transactions).

·         Void receipts, transactions, or deposits in any module.

·         Enter deposits using the Bank Deposit Entry window.

·         Enter adjustment transactions using the Reconcile Bank Adjustments window.

·         Adjust the checkbook balance to zero using the Reconcile Bank Statements window.

Transfer Existing Checkbooks to Bank Reconciliation

Complete the following steps to transfer existing checkbooks:

1.       Reconcile existing checkbooks using your previous system.

2.       Set up each reconciled checkbook, ensuring that the last reconciliation balance is the bank statement ending balance from Step 1.

3.       Enter transactions for outstanding checks and deposits that have not cleared as of the reconciliation in Step 1.

4.       Post. Make sure that outstanding checks and deposits do not re-post to General Ledger, if previously posted from another module.

Ø  Reconcile the existing checkbook manually or in your other system before setting up a checkbook in Microsoft Dynamics GP. Reconcile the checkbook when the monthly bank statement is received. Otherwise, there may be a number of outstanding checks and deposits that must be entered manually.

Ø  Use the Checkbook Maintenance window to set up each of the reconciled checkbooks. Enter the last reconciled balance for each checkbook. The last reconciled balance is the ending balance on the last bank statement. Change the last reconciled balance until the checkbook is reconciled for the first time in Bank Reconciliation.

Ø  Enter checks, withdrawals, or deposits issued that have not cleared the bank since the bank statement to enter the last reconciled balances in Step 2. The checkbook balance is not the same as the cash account balance in General Ledger if all outstanding documents are not included.

Ø  Use the Bank Transaction Entry window to enter checks and withdrawal receipts. Use the Bank Deposit Entry window to deposit receipts or enter lump sum deposits.

Ø  Bank Reconciliation transactions are posted individually. There are no batches in Bank Transaction Entry. When transactions are posted, the checkbook and accounts in the General Ledger are updated.

NOTE: If transactions have been entered and posted in another module before registering and using Bank Reconciliation, these transactions may have previously updated General Ledger. Do not post these transactions to General Ledger as duplicate entries may result.

Some key points to remember from Setting up Bank Reconciliation:

·         Two user-defined fields used to track additional information related to checkbooks are provided. The User-Defined 1 field is also available for sorting on reports.

·         Customize transaction types and numbers to reflect your business’ needs.

·         An unlimited number of checkbooks can be set up to manage a company's cash.

·         When using Bank Reconciliation, use the cash account from the checkbook being used when entering transactions in other modules.