Sage Pastel • Overview of the Bank Reconciliation

Overview of the Bank Reconciliation

Pastel gives you the option of reconciling your bank accounts.

Note that the use of this facility is optional.

Pastel lets you match the bank statement with Pastel’s cash book transactions. You can then see transactions which are on the bank statement but which are not entered into Pastel, and vice versa.

You perform this matching via the reference (cheque or deposit slip number) on each transaction. You can enter the bank statement information manually, or you can import the bank statement via direct bank feeds and perform the reconciliation electronically.

You process the bank reconciliation in the Process…Bank Reconciliation menu option.

Entering Cash Book Transactions

You enter cash book transactions in the Process…Cash Book menu option. As far as the reconciliation goes, you need to be aware of two factors when processing:

·How Pastel uses the transaction’s reference field in the reconciliation

·How to exclude transactions from the reconciliation.

The Reference Field

Pastel groups all transactions with the same reference together for reconciliation purposes.
For example, you allocate cheque CHQ00100 to two accounts. To do this, you enter two transactions, and you give both a reference of CHQ00100.
Pastel adds their amounts together and you reconcile the total amount of the cheque. This is correct because that is the amount which appears on the bank statement for the cheque. The same situation applies to deposits, where you can have many items on one deposit slip. You must assign each item the same reference.

To ensure that references are unique, use an alpha prefix to separate your references. For example, precede your cheque numbers with the letter “C”, and deposits with the letter “D”. This in any event makes reading an audit trail easier.

Tip If you follow our suggestion, always add leading zeroes after the alpha part of the reference. For example, use “C0000123” instead of “C123”. This ensures that your audit trail prints in the sequence you expect it to.

Excluding Transactions from the Reconciliation

It is sometimes useful to exclude certain transactions from the reconciliation. You do this by setting the reference to “ZZZZZZZZ”.

For example, when you start using Pastel there will be transactions which are already included in the bank balance, but which are not yet on your bank statement. When these appear on the bank statement and are not outstanding in Pastel, this could cause confusion. You can overcome this as follows:

· Create a transaction for each item which is included in your bank balance but which is not yet on the bank statement. Set the general ledger account for this transaction to be the bank account itself, and the reference to be the correct one.

· Create a contra entry for the transaction, also to the bank account, with the opposite sign and with a reference of “ZZZZZZZZ”.

The result of this is that your ledger balances are unaffected, but the bank reconciliation will now correctly show the item as outstanding on the bank statement.