Instructions

It is important to know how much money you have in your bank account. Banks occasionally make mistakes and entry errors can occur. Reconciling your bank account each month will ensure that you have accurate balances. In order to get an accurate ending balance for your bank account you must begin with a correct opening balance, therefore it is important to properly enter the information from your bank statement. The reconciliation process takes the amount that you enter as your bank statement's ending balance and makes adjustments to it in order to arrive at the balance in the General Ledger. These adjustments come primarily from checks you have written and deposits you have made, which have not arrived at the bank to clear your account. These items are called "uncleared." "Uncleared" or "outstanding" transactions are divided into two groups: those within the ending date of your bank statement and those beyond the ending date of your bank statement.

As you begin reconciling, review your bank statement for any transactions that are not in your current records. Create Miscellaneous Transactions or General Journal entries for these transactions. An example of an item that you might not have entered is your bank service charge. Refer to your Tenant Pro User Manual for complete instructions on Miscellaneous Transactions and General Journal entries.

Your First Reconciliation

Your first Tenant Pro reconciliation may take some extra time, as you must enter any uncleared transactions from your last bank statement, unless you have already done this as part of your Property Beginning Balance entries. These entries may take the form of individual outstanding checks and deposits, or may be part of a lump-sum entry created as the beginning balance in your cash account.

The Opening Balance field in the Bank Reconciliation window represents the sum of all transactions previously marked as "Cleared" during bank reconciliation. The Opening Balance field will show a zero for your first reconciliation. The property beginning balances will show as uncleared items which you will need to clear to bring your first reconciliation into balance. Successive opening balances will display the total of all cleared transactions, shown as the prior month's ending balance.

Entering Uncleared Checks and Deposits

When you reconciled your last bank statement before you began using Tenant Pro, there were probably some checks and/or deposits which remained outstanding. As you reconcile your first bank statement in Tenant Pro, you will have to enter those outstanding items before they can be cleared to accurately affect your bank account.

Because your beginning cash balance represents uncleared items, you should not enter both a lump sum beginning cash balance and individual checks or deposits, or you will be accounting for the same monies twice. If you decide to enter individual transactions making up that cash balance, your beginning balance transaction should show a zero amount for your cash account.

Usually you will enter checks using the actual chart of account numbers that are affected. You are not allowed to make transactions affecting income or expenses in a different fiscal year. If you need to enter a check for a previous year you must use the Retained Earnings account as the offsetting account.

Even if you ordinarily use the Enter Bills/Pay Bills functions to enter your bills and write checks to your vendors, occasionally you may need to write a check without first entering a bill. Common reasons are tenant checks or one-time checks to a vendor with whom you do not intend to have an ongoing relationship. Even if you hand-write a check, in order to have accurate records of the transaction, the check must be entered into Tenant Pro. Use the Add command on the Checkbook window when you want to create a check without first having to enter it as a bill.

Most bank deposits are compiled automatically from tenant payments and miscellaneous transactions. For uncleared deposits it is not necessary to enter each item making up a deposit in order to reconcile your bank statement. You will just need to enter a single entry in the Miscellaneous Transaction window to represent the total uncleared deposit amount. Again, you cannot enter a prior year transaction to offset an income or expense account, so you must offset the entry to Retained Earnings. A memo to help identify this entry is also helpful.

Clearing or Unclearing Previously Cleared Transactions

You may need to "unclear" a transaction that has already been cleared, or it may be necessary to delete and re-enter a transaction that has already been marked as "cleared." If this is necessary, you must go to the check register, find the transaction you need to clear or unclear, highlight it and then go to the Action menu to select Clear or Unclear Transaction. This will clear it or unclear it from your bank reconciliation. The uncleared transaction will once more be included in the Bank Reconciliation window. If you have uncleared a check, the next time you reconcile, the opening balance in the Bank Reconciliation window will need to be adjusted, adding that check amount to the figure displayed. If you have uncleared a deposit, the opening balance should be decreased by the amount of that deposit. To do so, simply double-click in the Opening Balance field to make it accessible to edit.

Performing the Reconciliation Each Month

When you are ready to reconcile your bank account, use the following steps:

1. Open the Bank Reconciliation window.
2. Select a bank account from the Account to Reconcile field pop-up list.
3. Verify the opening balance, which should be the ending balance from your last month's bank statement. (If you are performing your first reconciliation, your opening balance will be zero.)
4. Enter your bank statement's ending balance.
5. Enter the closing date of your bank statement in the Stmt Date field.
6. In the two scroll boxes titled Deposits and other Increases to Cash and Checks and other Decreases to Cash, mark any items that appear as cleared on your bank statement by clicking on each transaction. Clicking a transaction makes a checkmark appear in the Clr column. If you wish to remove a checkmark, click on the line item again.
7. After all cleared items appearing on your bank statement are marked, the Difference amount should show $0.00. Click Done to complete the reconciliation. If you would like to finish the reconciliation at a later time, click Leave, and any changes made will be retained. If your Difference amount does not show $0.00, refer to the section on "What if I Don't Balance?"

If you need to leave the Bank Reconciliation window before you complete the reconciliation process, use the Leave button and any changes that you have made will be retained. However, you will be required to re-enter the Bank Statement Ending Balance when you return to the reconciliation window.

Printing Reconciliation Reports

You may print a summary report of the bank reconciliation at any time by clicking the Print button. When you are finished reconciling your bank account, a dialog box that asks "Do you wish to print the Bank Reconciliation report?", will give you a final opportunity to print. This summary report is calculated using only the information that you enter into Tenant Pro during the reconciliation process. Any mistakes during the reconciliation process such as incorrect opening balances or erroneously clearing/unclearing items will directly impact the information on this report. If this report doesn't seem correct, you will need to troubleshoot your reconciliation to find out where your error was made.

Verifying Your General Ledger Bank Balance

The Bank Reconciliation Summary Report you printed will make the final step of reconciliation a simple process.

1. Compare the figure on the Bank Reconciliation Summary Report entitled "Current Bank Balance" to the General Ledger balance for the same day that you reconcile. Do not expect to see the number from the field entitled "Checkbook Balance as of" on your General Ledger. You are balancing your General Ledger amount to the amount in the field entitled "Current Bank Balance" on the Bank Balance Summary Report.
2. If the two figures match, you are reconciled. If they do not match, refer to the section called "What If I Don't Balance?"

Reconciling Transactions Added to Previous Periods

You may need to enter transactions for periods that you have already reconciled. Any transaction to your bank account, that has not already been marked as cleared in your bank reconciliation process, will appear for reconciliation when you next perform that function. If the transaction actually cleared the bank, but you hadn't recorded it, you should have been out of balance during your last reconciliation. It will be necessary for you to correct this by reversing whatever transaction you performed to bring things into balance during the last reconciliation.

If you reconciled in the previous month by making an adjusting entry to your cash account, you would now need to make a General Journal entry reversing the account that you used to offset cash. Assuming that you used the default Bank Reconciliation Adjustments account (#5412) to balance, your cash account (#1000) would have been adjusted to make up for the difference. For example, let's assume that you were unable to locate the cause of a $12.50 out of balance condition last month that caused you to be short. When reconciling, you used expense account #5412 to make an adjusting entry to bring you into balance, so an automated journal entry was created, debiting the expense (#5412) and crediting cash (#1000). Now you have discovered the cause was a bank service charge you overlooked. It will now be necessary to open the General Journal window and make an entry to debit the actual bank service charge expense account in order to correctly record the bank charge, as well as a credit (to reverse) the original expense to the Bank Reconciliation Adjustments account. Notice that the cash account will not be adjusted because it was already done during the original reconciliation.

What If I Don't Balance?

Here are some reasons that the Bank Reconciliation can be out of balance:

1. A transaction has been cleared in error.
2. A transaction has been uncleared in error.
3. The wrong opening balance was entered. (It should equal last month's ending balance.)
4. The wrong ending balance was entered.
5. You have uncleared or edited the dollar amount on a previously cleared check and you failed to edit the opening balance in the Bank Reconciliation window adding that amount back to the figure displayed.

The following list contains several things that should be checked in the event your Difference field does not equal zero:

• Did you balance to the penny last month; or could adjusting entries make your account balance wrong? If you made adjusting entries for items you found on the bank statement that weren't already in your Tenant Pro records, were they made correctly?

• Are you sure you have every item on the bank statement recorded in Tenant Pro and showing in the Bank Reconciliation window? Look for bank service charges, ATM withdrawals, insurance premiums, or NSF returned items and their corresponding fees, which you may have failed to enter into Tenant Pro.

• Your next step is to start over with comparing all cleared items against those you have marked as cleared. Are all items on the bank statement marked as cleared in the Clr field in the Bank Reconciliation window? Does the dollar amount of each check and deposit in Tenant Pro match exactly to the dollar amount showing on the statement? Although rare, it is not unheard of for banks to post checks for the wrong amount.

• If the amount out of balance is small, some people will choose to make an adjustment. If any amount other than $0.00 is in the Difference field when you click Done, the Adjusting Entry window will open. You are easily able to make an adjusting entry which will bring your cash balance into agreement with your bank statement. If you use this method, be aware that the adjustment will create a Miscellaneous Transaction entry, and that the property affected will be the property you specify in this Adjusting Entry window. Also, if this adjustment causes an increase in cash, a deposit number of 99 will be created.

Tips

• If you mark a check NSF it does not remove the dollar amount from your deposit. It puts the amount of the NSF at the bottom of the Bank Reconciliation window in "other items" and you must clear it from there.
• If you accidentally cleared something last month that you shouldn't have, go to the Check Register window and highlight the item then go to the Action Menu and choose the Unclear option. This will cause it to reappear in the Bank Reconciliation window.
• Clearing items in the Check Register window using the Action option does not affect financials. Clearing items in the Bank Reconciliation window DOES affect financials.
• If you print the Bank Reconciliation Summary Report from the Bank Reconciliation window, the current bank balance on that report should equal the Bank Balance Summary Report. The number one reason that they don't match is due to incorrectly cleared/uncleared items.

Following the procedures above, your bank reconciliation should be a simple process, whether this is your first one or your one-hundredth one. If you encounter any problems, your technical support team is here to help you.