Reconciliation

Reconciling your bank statement should be done every month when your bank statement arrives in the mail. The reconciliation reviews the income and expenses that you have recorded in your checkbook or accounting program compared to what the bank has recorded.  The steps for completing this in Membership Toolkit are listed below.  (A hard copy of this information is attached if you prefer to download it and print it out.)

Step 1 – Review Your Bank Statement

On your bank statement, you will need to find:

1. Starting and ending date for this statement
   
2. Beginning and ending balance
   
3. List of deposits for the month
   
4. List of withdrawals for the month
   

Step 2 – Review Your Account Ledger

To pull up your account ledger in your Membership Toolkit account:

1. Go to the Accounting tab.
   
2. Click on the blue “amount” under the Balance column in the Asset Accounts table.
   
3. To begin reconciliation, click on the “reconcile this account” button.
   
4. Enter the starting date and ending date from your bank statement.
   
5. Enter the starting balance and ending balance from your bank statement.

Step 3 - Withdrawals

Compare each check recorded in the ledger against each check noted on the bank statement. For checks that you have written that cleared the bank (they are shown on your bank statement as being cleared), check these off in the “C” column on your Membership Toolkit ledger. If you have a long list, it is a good idea to mark them off on your statement as well. This way you are assured that you have recorded all checks or other withdrawals in your online ledger.

If there is a withdrawal that is included in the bank statement but has not been recorded in your Membership Toolkit online ledger, you should pause your reconciliation and enter the withdrawal. To do this:

1. At the bottom of the page, select “save and finish later.”
   
2. Go the accounting summary page by clicking on the Accounting tab.
   
3. Select the “write a check” button for the account the withdrawal came from. 
   
4. Once completed, return to the account ledger and select “reconcile this account” again.

Step 4 - Deposits

Compare each deposit recorded in the ledger against each deposit noted on the bank statement. When you match a deposit from your statement to a deposit recorded in your online ledger, check these off on your Membership Toolkit ledger. If you have a long list, it is a good idea to mark them off on your statement as well.

If there is a deposit that is included in the bank statement but has not been recorded in your online ledger, you should pause your reconciliation and enter the deposit.  To do this:

1. At the bottom of the page, select “save and finish later.”
   
2. Go the accounting summary page by clicking on Accounting tab.
   
3. Select the “receive misc payment” button.
   
4. Change the field “Receive funds into” to the correct Asset Account.
   
5. Once completed, return to the account ledger and select “reconcile this account” again.
   

Step 5 – Complete the Reconciliation

Once you have checked off all of the deposits and withdrawals that were listed on your bank statement, the Difference shown in the top right corner should be $0.00.

If the difference is $0.00 – Congratulations! At the bottom of the page select the “finish reconciliation” button.

If the difference is not $0.00 – you need to find out why.

1. Is your starting balance for your online ledger correct?
   
2. Did you identify all of the deposits?
   
3. Did you identify all of the withdrawals?
   
4. If you need to do more investigation, you may find it easier to work from a paper copy of your online ledger. Go back to the account ledger and download the ledger into excel.
   

Journal Entry Adjustment

If you don’t balance – the system will prompt you to make a Journal Entry Adjustment to make it balance.   Best practice would be to review your bookkeeping and try to find the error yourself.

First Bank Reconciliation:

 To clear the opening balance transaction entered when you setup your bank account starting balance, when you perform your very FIRST bank reconciliation you will need to:

1. Enter $0 in the starting balance field at the top of the reconciliation. Normally the amount in this field is the beginning balance showing on your bank statement for the month you are reconciling.
   
2. Mark the opening balance transaction you previously entered upon setup, as cleared.
   

 

 

1. Continue with your bank reconciliation as you normally would and mark cleared all other ledger transactions that match transactions on your bank statement.
   

NOTE: If you do not ‘clear’ the opening balance transaction on your very first bank reconciliation, the transaction will continue to show as an outstanding deposit on future bank reconciliation reports.

 

If you DID NOT clear the opening balance on your first bank reconciliation, you can still clear it on a future bank reconciliation:

1. In the starting balance field at the top of the page, whatever the amount is showing in this field SUBTRACT the amount of the opening balance transaction you entered when the bank account ledger was initially set up.
   

1. Mark the opening balance transaction as cleared. 

 

1. Continue with your bank reconciliation as you normally would and mark cleared all other ledger transactions that match transactions on your bank statement.

This will have a $0 net effect on the bank reconciliation and will finally clear the transaction from showing as an outstanding item.

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