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Banking

Under banking menu, we reconcile the bank account with the bank statement issued by the bank. In theory, the cashbook and the passbook must show the same balance. But practically, this is rare. Due to some causes, there will be a difference between two balances. 
Below are reasons for the differences.
 

1. Cheques issued but not presented for payment

2. Cheques deposited but not cleared

3. Bank charges

4. Standing instructions given to the bank

5. Return of cheques

6. Interest credited by the bank.
 
In order to confirm that the balance as per AccountingGuru tallies with the balance as shown in the bank statement, we run the banking report. But ,before we run the banking report we need to first identify the payments which are not appearing in the bank statement.

 

To do this, click on "Banking" menu. The following screen will appear. Normally, this reconciliation is done on the 1st of every month. Here, update the “From Date” and the “Thru Date” and click on “Reconcile”.
 

 

 

The following screen will appear when we click on Reconcile. Here, all the payments and receipts for the month will appear. i.e if the dates was provided from 1st oct  and thru date was updated as 31st oct, all payments and receipt for the month of October will appear.

 

 

 

Check with the bank statement. Let's take the example that line item 2 was cleared on 22-Oct-2011 and line item 3 was cleared on 28-Oct-2011.Now,update the date on which the payments / receipt have been cleared in the bank against the line item and check the box under the column “Status” and click on “Mark as Reconciled”. The system will then prompt “2 items was reconciled successfully.

 

 

 
After this step, we need to run the Bank Reconciliation Report to confirm if the balance with accounting guru tallies with the bank statement. ( Refer the "Banking Reports" under the menu "Reports" on how this is done)
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