Reconciling your bank account is quick and easy using the Reconcile Accounts feature. This integrated feature will assure you rarely encounter an out of balance. Any out of balance that may occur can usually be easily corrected.

What steps do I take to correct an out of balance in my bank reconciliation?

The steps in this support note are sequenced to help you quickly pinpoint why your account is out of balance.

Step 1. Establish if the out of balance is with the current or a previous reconciliation.

The steps to determine this are:

1. Locate the bank statement you last reconciled your account to and note its closing balance.

2. From the Banking Command Centre, click Reconcile Accounts.

3. Set the Account field to your bank account then press the <tab > key on your key board. Make sure none of the transactions are marked as cleared.

Does the Calculated Statement Balance equal the bank statement balance noted at step 1?

· Yes- they are the same.
The problem will be with the current reconciliation

· No -they are different.

This signifies:

· A previously reconciled transaction(s) has either been deleted, or, its Amount changed; or

· The bank account was once reconciled to an amount different to the particular bank statement (known as 'fudging'); or

· The bank account Opening Balance has been changed.

Step 2. Find the first bank reconciliation that no longer balances

Deleting or changing a previously reconciled transaction will cause all future reconciliations to become out of balance. Therefore, the reason for the out of balance will be found in the first bank reconciliation that does not balance.

1. From the Banking Command Centre, click Reports, highlight the Reconciliation Report then click Customise.

2. Set the Accounts field to your bank account. Set the Select By field to List of Recorded Statement Dates then set the Statement Date field to capture the first previous bank statement

The report Customisation – Reconciliation Report window displayed below shows the Select By and Statement Date fields.

3. Display or print the report.

4. Compare the report with the corresponding bank statement – do they balance?

If the Reconciliation Report and bank statement balance, then redisplay the Reconciliation Report for the next previous Statement Date and check it against its corresponding bank statement. Repeat these steps until the Reconciliation Report balances with the corresponding bank statement.

Important information:

· The reason for the out of balance relates to the ‘first’ reconciliation that doesn’t balance. For example: When checked, the reconciliation dated 1/4/08 doesn’t reconcile, yet, the reconciliation for the 1/3/08 does reconcile. The reason for the out of balance will relate to reconciliation dated 1/4/08.

Step 3. Determine the cause of the out of balance

A deleted reconciled transaction –

Please review the two Reconciliation Reports shown below.

Reconciliation Report #1 is a hard-copy of the report printed when the account was reconciled (in this example it represents the bank statement).

Reconciliation Report #2 is one that is now being displayed by MYOB.

Reconciliation Report #1

Reconciliation Report #2

Note:

· Cheque #1 and deposit CR000042 are both missing from Reconciliation Report #2. This clearly indicates both transactions have been deleted.

There maybe circumstances where a previously reconciled transaction is reported as not being reconciled.

A reconciled transaction amount has been changed

Carefully compare the reported transaction amounts with those on the corresponding bank statement (or hard copy of the Reconciliation Report). If you find a transaction amount has been changed, then:

· Where possible, open the transaction and change the Amount back to what it was when the transaction was reconciled.

· Delete the transaction and then re-enter and re-reconcile it –

Note: We recommend you first seek your accountant's advice before you make any changes to your company data, as this could affect your tax reporting obligations.

A forced reconciliation –

Referring to the hard-copy of the Reconciliation Report, compare the Expected Balance on Statement with the corresponding bank statement closing balance. In the Reconciliation Report shown just below, the Expected Balance on Statement ($1800.00) is different to the bank statement closing balance $1900.00 (not shown).

Note: If you do not have a hard-copy of the Reconciliation Report made at the time the account was reconciled, then to make the above comparison you will need to restore a backup of your company data file that was made at about the time the reconciliation took place.

How can we check to see if our account Opening Balance has been changed?

To determine if your bank account Opening Balance has been changed.

1. Restore or open the earliest known copy of your company data file.

2. Go to Setup on the menu bar, choose Balances then click Account Opening Balances.

3. Compare the account Opening Balance with the Opening balance amount in your current working company file.

If the Opening Balance in your working company file has been altered, changing it back to what it was should correct your reconciliation. Please note that changing the account Opening Balance will affect your financial reporting (balance sheet).

How can a forced reconciliation be corrected?

Note: We strongly recommend you discuss the following options with your accountant prior to making any changes to your company data file.

Option #1 – undo or delete the out of balance reconciliations. Once they have been removed, re-reconcile the account using the correct statement closing balances.

Note:

· Current MYOB program versions include an Undo Reconciliation feature.

· If you are using an MYOB program that doesn’t have the Undo Reconciliation feature

Option #2 – record and reconcile an adjustment transaction for the out of balance amount.

If MYOB’s Calculated Statement Balance is greater than the bank statement closing balance, use Spend Money to record the adjustment. Similarly, use Receive Money where the Calculated Statement Balance is less.

In the following example a bank reconciliation was forced and MYOB’s Calculated Statement Balance is less than the bank statement closing balance.

To correct this out of balance:

1. From the Banking Command Centre, open Receive Money.

2. Set the Account field to your bank account.

3. Set the Date and the other transaction details as needed.

4. Set the Acc# field in the lower portion of the window to a ledger account you want to use for the adjustment (we recommend you check which ledger account you should be using with your accountant).

5. So the adjustment isn't reported on the BAS, use the N-T Tax Code.

A sample of the transaction is shown just below.

6. Click Record and return to the Command Centre.

7. From the Banking Command Centre, open Reconcile Accounts.

8. Set the Account field to your bank account.

9. Enter the Bank Statement Date (we suggest you use the date of the current bank statement).

10. Mark the adjustment transaction as being reconciled.

11. Check that the account balances then click Reconcile.

Correcting the current reconciliation

Issues that only affect the current bank reconciliation are usually quite easy to identify and correct.

A transaction marked to be reconciled is for a different amount to that shown on the bank statement.

Most bank statements include a running balance which you can use to check your reconciliation as you go along.

With the Reconcile Accounts window open and set to reconcile your bank account:

1. Clear any transactions that you may have marked as being cleared.

2. Looking at your bank statement, note the first listed transaction and the adjacent running balance.

3. Identify this transaction in the MYOB Reconcile Accounts window and mark it as being cleared.

4. Compare the MYOB Calculated Statement Balance with the running balance noted at step 2.

In the example shown below, the first transaction listed on the bank statement was CR000051. After marking this transaction as cleared, the Calculated Statement Balance ($2220.00) agreed with the bank statement running balance (not shown).

5. Repeat steps 1-4 for each subsequent transaction listed on the bank statement.

If at any time after marking a transaction as Cleared there is variance between the bank statement running balance and the Calculated Statement Balance, carefully check the transaction amount with your bank statement - look for transposed amounts for example $25.25 instead of $25.52.

6. Open the transaction by clicking its zoom arrow and edit its Amount. Click OK to return to the Reconcile Accounts window and continue checking the remaining transactions.

Error on bank statement

If your bank statement has grand totals for deposits and withdrawals, compare these amounts with those shown at the bottom of the Reconcile Accounts window.

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