Reconciliation help - Book balance does not match GL balance 1

[Kwekoolio]

Hello all, thanks in advance for the assistance!

I have someone working on bank reconciliation for me in ERP 5.5 and he somehow has a situation where, despite the fact that he has cleared all withdrawals and deposits and made the needed entries, his reconciliation is not balancing.

There is a difference of over $100,000 between the "Book balance" on the summary tab and the GL balance seen when we go to the G/L Account History Inquiry dialog and look up the bank's account.

I am looking for some guidance regarding potential causes of this discrepancy - it appears that the book balance field is not actually taken from the general ledger but is somehow calculated separately. My guess is that it should match the GL balance in theory but we did something to screw up the synchronization. Any ideas? Please let me know.

Thanks again!

 

[Kwekoolio]

Okay, so I have found something on the web that speaks to this (link and text below). My question now is, in step 3 below, are they asking for an entry equal to the difference between 1) the statement balance created in step 2 and 2) the "real" statement balance? This is my interpretation but I wanted to see if anyone has a different understanding on what it means:

http://kb.accpac.com/cgi-bin/sageso..._faqid=24148&p_created=1192210294&p_topview=1

Book Balance in Bank Reconciliation Does Not Match Account Balance in General Ledger
Summary


The book balance under the Summary tab in the Reconcile Statements window does not match the balance of the bank account in General Ledger.


Solution


1. The Book Balance figure is not taken from the GL accounts. It comes from write offs, adjustment entries, manual deposits and manual checks entered in bank services. The formula is as follows: Last period closing book balance (+) deposits from AR (-) withdrawals from AP and Payroll

2. The book balance should always equal the GL account balance, UNLESS there is a previously incorrect bank reconciliation. If there is an incorrect bank reconciliation performed which makes your book balance different from your GL account balance, then all future reconciliations will also be off by the same amount. The following information / procedure below shows how to get around this problem. This can be corrected by cleaning up the book balance amount to match the GL account balance. To do this is by making an offset entry to bring the book balance amount equal to the GL account balance.

The following are the steps:

1.Backup the database.
2.Enter a “Statement Balance”, making sure that Adjusted Statement Balance is equal to Adjusted Book Balance.
3.Create a bank Entry for the difference in balances.
4.Post the bank reconciliation
5.Delete the GL batch

Note: Make sure there are no transactions reconciled and Bank Entries entered yet before performing the aforementioned steps, otherwise, the amount to enter in Bank Entry will be different. From then on, both “GL Account Balance” and Bank Services “Book Balance” should always have an equal amount.

3. See if the Bank Rec that posted has an out of balance value (normally it should not post when it is out of balance but there may be a possibility that there maybe an error along the way).

 

[Jay Converse]

You make the Bank Entry transaction on the Bank Rec screen to make the difference come out to zero, debit or credit, whatever it takes.

And you don't have to backup the database, that's way overkill for something as simple as this.

 

[Kwekoolio]

Thanks!

One follow-up question: the instructions also say to not reconcile any transactions before taking these steps. My problem is that we have done the entire reconciliation already.

Does it make sense to keep the other reconciliation entries and post the reconciliation, following which we edit the resulting GL batch by deleting the entry that made the book balance adjustment?

 

[Jay Converse]

There's a simpler answer. When you do the bank entry, use the bank's GL account. This creates the opposite entry automatically in the GL batch, and you don't have to delete anything.

 

[Kwekoolio]

Makes perfect sense. Thanks again.