Bank account reconciliation is an important factor that helps to sustain the precision of balances and bank transactions. In case you are searching for easy guidance to access the reconciliation feature in the software Sage 50, you are in the perfect place.
First, you need to know what bank reconciliation is all about.
What is Bank Reconciliation?
When you settle your bank records or your bank statement, you compare it with your particular bookkeeping records of the same tenure and locate every inconsistency. Then, you create a record of the discrepancies, hence, it is certain that no capital is absent from your particular business.
Bank reconciliations are not just restricted to bank accounts. Any credit card or PayPal account or any other account with the particular business transactions must be reconciled.
How to do Sage 50 Bank Reconciliation for the first time?
Here are the things you need to remember before you start:
- For the starting setup, you are allowed to reconcile your particular account in the present fiscal year.
- In case you reconcile outside the present fiscal year:
- Conduct a Manual Reconciliation till the last Fiscal Year’s end
- Move Forward with the Bank Reconciliation Setup
Step 1: Enable Bank Reconciliation
- In the Home screen, Go to the Enhanced View option.
- Now choose Company. Now double-click Chart of Accounts.
- Now in the Classic View option, Press on Chart of Accounts twice.
- Press on your Bank Account twice.
- Choose the tab for Reconciliation and Deposits.
- Put a mark in the option, Save Transactions for Account Reconciliation.
- Press on the Setup button that is available at the bottom of the particular page.
- Create Revenue accounts for the following ones:
- Exchange Gain
- Interest income
- You can also create an expense account for:
- NSF fee
- Bank charges
- Interest Expense
- You can also retitle the Interest Expenses to approve with the Bank Statement
- Press OK
Step 2: To Set up Bank Reconciliation
- From the Home Screen, Press double-click the Account Reconciliation Journal
- Select the particular Bank Account that you intend to reconcile
- Add the following from the particular report given to you by your financial institution
- Statement End Date
- Statement Opening Balance
- Statement Start Date
- Reconciliation Date
- Statement End Balances
- Choose the button, Add Prior Outstanding
- List all the particular outstanding transactions prior to your statement start date
- Choose Yes when you get the notification to save changes
- Press No, In case there is no outstanding transaction to include
- Press OK
- Set the date in the Show Resolved Transaction On or After option to the particular older outstanding transaction
- From the particular list option for Resolved Transactions:
- Choose outstanding transactions dated prior to the statement initiating date
- Press Add to shift to the Outstanding Transactions list
- Choose Insert Outstanding to include transactions that do not come in the list
- When complete, Press OK
- Review and checkout if the discrepancy is zero prior to clearing transactions
- In case it is not zero, you have either missed including outstanding transactions
- Or you have included a wrong transaction on the Add Prior Outstanding screen. It can also be that the opening balance amount in the bank reconciliation is wrong.
What is Sage 50 Bank Reconciliation Discrepancy?
Sage 50 Bank Reconciliation Discrepancy is a type of program that is created to assist accountants and help them locate and rectify several bank reconciliation errors in Sage that may arise during tax preparation.
Bank reconciliation statements are financial documents that summarize the activities of your bank account along with internally registered activities, displaying that the two records agree with one another and are accessed to reconcile with your bank accounts.
We hope that this article has helped you with your Sage 50 Bank reconciliation first time. We have highlighted all the concerning steps and methods in regard to it. All you require to do is adhere to them accordingly. We have also highlighted the importance of bank reconciliation in business for a better understanding of the topic.
If you are new to Sage 50 accounting and not familiar with the accounting software to that extent, then we highly recommend that you follow the steps in the given order. In case you miss out on any step then the reconciliation will be unsuccessful.
Still, If you encounter any issues or face any problems, then we highly recommend that you consult a Sage professional. Our team of Sage experts is highly skilled and qualified to resolve all your Sage issues. They will help you to solve your Sage issue in an instant and will provide you with a permanent fix.
Consult Sage 50 Accounting Experts
Get help in resolving your software issues, auditing your company files, automating payroll, filing taxes online, and much more. Our Sage 50 accounting experts are here to help you with everything related to bookkeeping, accounting, payroll, and tax filing. We’re available round the clock, so get in touch whenever you need help.
Frequently Asked Questions
What are the Benefits of Bank Reconciliation?
Bank reconciliation can be quite tedious, but the financial benefits pay off. Here are the reasons why they are imperative:
• To Monitor Cash Flow
• To Check your Business Reality
• To Analyze Frauds and Discrepancies
• To Discover Bank Errors
How often one Should Reconcile their Bank Accounts?
Generally speaking, the frequency of reconciling bank statements depends on the total volume of your transactions.
Some businesses that have funds entering or leaving their business accounts several times during a day, Reconcile on a regular basis.
Why there is often any Difference Between the Current Reconciliation and the Previous Reconciliation?
The editing of your particular transactions may lead to a difference between your present and past reconciliation. In case you have reconciled previously the next most post February, you will require to undo all the transactions which were reconciled and then analyze every transaction manually for all the changes that have happened since the last month.
Luke uses his passion for accounting and software to provide tips and tricks related to bookkeeping, accounting, payroll and finance in general. Apart from accounting, he loves to watch TV shows including Friends, Stranger Things, etc.