Weekly Review: Daily Bank Reconciliations

In his various accounting best practices books like Fast Close Stephen Bragg recommends reconciling bank data on a daily basis. This is actually very easy to do with DynamicsGP and Great Plains. This process will shorten your month end close since you don’t have to wait for the bank statement, and it will let you find and fix issues throughout the month, not just at month end. So how do you it?

  • Option 1: Use the Electronic Reconciliation module and get a special file from your bank every day. If you’re a large company dealing with large banks, this is a great option, but it’s not for everyone.
  • Option 2: Use your bank’s website and normal reconciliation. Admit it, you get your bank balance off of your bank’s website now so this is easy, even for little firms with small banks.

Here are the steps:

  1. Go to your bank’s website, get today’s posted balance and print out the daily transactions back to when you last got your statement.
  2. Start a bank reconciliation process in DynamicsGP.
  3. Enter today’s posted balance for the bank statement ending balance and use today’s date for the dates.
  4. Check off cleared items and balance the statement to a zero difference.
  5. When finished, click OK. DON’T CLICK RECONCILE! Clicking OK will save the reconciliations.
  6. On the next day, repeat these steps for 1 day’s worth of transactions.
  7. At month end, verify the totals with the statement and then click reconcile. The month end bank rec process is now minutes, not hours.

There a few potential pitfalls to look out for:

  1. There may be a few days at month end where you can’t reconcile into the next month until you have received the final statement. In this case you can either rely on the website as the final reconciling document or have a few days to make up early in the next month. Both options have problems, I’ve seen banks have website issues that cause the statement and website to not match, but this is pretty rare. However, Delaying a few days tends to break the nice daily balancing rythm you develop. There’s no perfect option, pick whichever one fits your business requirements.
  2. Make sure you know where you left off from the day before. Often bank websites won’t let you print just one day, you have to print the whole screen which can overlap days.

Originally Posted by Mark 3/17/2006 10:05:00 AM

3 Replies to “Weekly Review: Daily Bank Reconciliations”

  1. When I was a Controller using Dynamics, this was one of my favorite features. If you keep up with it, the month-end reconciliation is a simple “click”, done!

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