Reconcile Bank Accounts

You perform bank reconciliation to make sure that your various business transactions and expenses are reflected correctly in the company books. You do this by comparing and matching entries in your internal bank accounts with bank transactions at your bank, and then posting the balances to your internal bank accounts to make totals available to finance managers. Bank reconciliation is also a practical way to discover and resolve missing payments and bookkeeping errors.

The following describes how to perform bank reconciliation with the Bank Acc. Reconciliation page.

Tip

You can also reconcile bank accounts on the Payment Reconciliation Journal page in connection with payment processing. Any open bank account ledger entries related to the applied customer or vendor ledger entries will be closed when you choose the Post Payments and Reconcile Bank Account action. This means that the bank account is automatically reconciled for payments that you post with the journal. For more information, see Applying Payments Automatically and Reconciling Bank Accounts.

Note

In the North American versions, you can also perform this work on the Bank Rec. Worksheet page, which is better suited for checks and deposits but does not offer import of bank statement files. To use this page instead of the Bank Acc. Reconciliation page, deselect the Bank Recon. with Auto. Match field on the General Ledger Setup page. For more information, see Reconciling Bank Accounts under United States Local Functionality.

The lines on the Bank Acc. Reconciliation page are divided into two panes. The Bank Statement Lines pane shows either imported bank transactions or ledger entries with outstanding payments. The Bank Account Ledger Entries pane shows the ledger entries in the internal bank account.

The activity of reconciling bank transactions with internal bank entries is referred to as matching. You can choose to perform matching automatically by using the Match Automatically function. Alternatively, you can manually select lines in both panes to link each bank statement line to one or more related bank account ledger entries, and then use the Match Manually function. The Applied checkbox is selected on lines where entries match. For more information, see Set Up Rules for Automatic Application of Payments.

Note

If bank statement lines relate to check ledger entries, you cannot use the matching functions. Instead, you must choose the Apply Entries action, and then select the relevant check ledger entry to match the bank statement line with.

When the value in the Total Balance field in the Bank Statement Lines pane equals the value in the Balance To Reconcile field in the Bank Account Ledger Entries pane, you can choose the Post action. Any non-matched bank account ledger entries will remain on the page, indicating some discrepancy that you should resolve to reconcile the bank account.

Any lines that cannot be matched, indicated by a value in the Difference field, will remain on the Bank Acc. Reconciliation page after posting. They represent some kind of discrepancy that you must resolve before you can complete the bank account reconciliation. Typical business situations that may cause differences:

Difference Reason Resolution
A transaction in the internal bank account is not on the bank statement. The bank transaction did not occur although a posting was made in Business Central. Make the missing money transaction (or prompt a debitor to make it), and then reimport the bank statement file or enter the transaction manually.
A transaction on the bank statement does not exist as a document or journal line in Business Central. A bank transaction was made without a corresponding posting in Business Central, for example a journal line posting for an expense. Create and post the missing entry. For information on a quick way to initiate this, see To create missing ledger entries to match bank transactions with.
A transaction in the internal bank account corresponds to a bank transaction but some information is too different to give a match. Information, such as the amount or the customer name, was entered differently in connection with the bank transaction or the internal posting. Review the information, and then manually match the two. Optionally, correct the information mismatch.

You must resolve the differences, for example by creating missing entries and correcting non-matching information, or by making missing money transactions, until the bank account reconciliation is completed and posted.

You can fill in the Bank Statement Lines pane on the Bank Acc. Reconciliation page in the following ways:

  • Automatically, by using the Import Bank Statement function to fill in the Bank Statement Lines pane with bank transactions according to an imported file or stream provided by the bank.
  • Manually, by using the Suggest Lines function to fill in the Bank Statement Lines pane according to invoices in Business Central that have outstanding payments.

To fill bank reconciliation lines by importing a bank statement

The Bank Statement Lines pane will be filled with bank transactions according to an imported file or stream provided by the bank.

To enable import of bank statements as bank feeds, you must first set up and enable the Envestnet Yodlee Bank Feed service, and then link your bank accounts to the related online bank accounts. For more information, see Set Up the Envestnet Yodlee Bank Feeds Service.

  1. Choose the Lightbulb that opens the Tell Me feature icon, enter Bank Account Reconciliation, and then choose the related link.
  2. Choose the New action.
  3. In the Bank Account No. field, select the relevant bank account. The bank account ledger entries that exist on the bank account appear in the Bank Account Ledger Entries pane.
  4. In the Statement Date field, enter the date of the statement from the bank.
  5. In the Statement Ending Balance field, enter the balance of the statement from the bank.
  6. If you have a bank statement file, choose the Import Bank Statement action.
  7. Locate the file, and then choose the Open button to import the bank transactions into the Bank Statement Lines pane on the Bank Acc. Reconciliation page.

To fill bank reconciliation lines with the Suggest Lines function

The Bank Statement Lines pane will be filled according to invoices in Business Central that have outstanding payments.

  1. On the Bank Acc. Reconciliation page, choose the Suggest Lines action.
  2. In the Starting Date field, enter the earliest posting date for the ledger entries to be reconciled.
  3. In the Ending Date field, enter the latest posting date for the ledger entries to be reconciled.
  4. Select the Include Checks check box to any suggest check ledger entries instead of the corresponding bank account ledger entries.
  5. Choose the OK button.

To match bank statement lines with bank account ledger entries automatically

The Bank Acc. Reconciliation page offers automatic matching functionality based on a matching of text on a bank statement line (left pane) with text on one or more bank account ledger entries (right pane). Note that you can overwrite the suggested automatic matching, and you can choose to not use automatic matching at all. For more information, see To match bank statement lines with bank account ledger entries manually.

  1. On the Bank Acc. Reconciliation page, choose the Match Automatically. The Match Bank Entries page opens.

  2. In the Transaction Date Tolerance (Days) field, specify the span of days before and after the bank account ledger entry posting date within which the function will search for matching transaction dates in the bank statement.

    If you enter 0 or leave the field blank, then the Match Automatically function will only search for matching transaction dates on the bank account ledger entry posting date.

  3. Choose the OK button.

    All bank statement lines and bank account ledger entries that can be matched change to green font, and the Applied check box is selected.

  4. To remove a match, select the bank statement line, and then choose the Remove Match action.

To match bank statement lines with bank account ledger entries manually

  1. On the Bank Acc. Reconciliation page, select a non-applied line in the Bank Statement Lines pane.

  2. In the Bank Account Ledger Entries pane, select one or more banks account ledger entries that can be matched with the selected bank statement line. To choose multiple lines, press and hold the Ctrl key.

  3. Choose the Match Manually action.

    The selected bank statement line and the selected bank account ledger entries change to green font, and the Applied check box in the right pane is selected.

  4. Repeat steps 1 through 3 for all bank statement lines that are not matched.

  5. To remove a match, select the bank statement line, and then choose the Remove Match action.

To create missing ledger entries to match bank statement lines with

Sometimes a bank statement contain amounts for interest or fees charged. Such bank statement lines cannot be matched because no related ledger entries exist in Business Central. You must then post a journal line for each transaction to create a related ledger entry that it can be matched with.

  1. On the Bank Acc. Reconciliation page, choose the Transfer to General Journal action.

  2. On the Trans. Bank Rec. to Gen. Jnl. page, specify which general journal to use, and then choose the OK button.

    The General Journal page opens containing new journal lines for any banks statement lines with missing ledger entries.

  3. Complete the journal line with relevant information, such as the balancing account. For more information, see Working with General Journals.

  4. To review the result of posting before you post, choose the Test Report action. The Bank Account Statement report opens and shows the same fields as at the header of the Bank Acc. Reconciliation page.

  5. Choose the Post action.

    When the entry is posted, proceed to match the bank statement line to it.

  6. Refresh or reopen the Bank Acc. Reconciliation page. The new ledger entry will appear in the Bank Account Ledger Entries pane.

  7. Match the bank statement line with the bank account ledger entry, either manually or automatically.

See Also

Reconciling Bank Accounts
Applying Payments Automatically and Reconciling Bank Accounts
Setting Up Banking
Set Up Rules for Automatic Application of Payments
Working with Business Central