You need to be following the instructions from the document titled “Check Account Reconcile Bank Statement using One Checking Account” or “Check Account Reconcile Bank Statement using Multiple Checking Accounts”. When finished following the procedures on either of these documents each month, the check balancing report will have amounts for the NEW BANK BALANCE, CHECKBOOK BAL and an OUT OF BALANCE.
- The NEW BANK BALANCE must balance you your bank statement ending balance.
- The OUT OF BALANCE must be zero.
- The CHECKBOOK BAL is the balance of your checkbook if ALL of the deposits and checks cleared the bank.
Each month A/R, A/P & P/R interfaces are obtained and posted into the G/L. Then any recurring and monthly manual journal entries are entered and posted. The next procedure is to print the G/L Trial Balance.
When you look at the Trial Balance report each G/L account, with a balance, will have an ending balance. The ending balance for the Checking Account G/L account # should match the CHECKBOOK BALANCE figure on the report printed when reconciling to the bank statement. If there is a discrepancy between the CHECKBOOK BALANCE amount and the G/L Trial Balance checking account ending balance follow the instructions on the document “Balancing G/L with Task 20 - Check Account - Single Division - No Payroll” or “Balancing G/L with Task 20 - Check Account - Multiple Divisions - No Payroll”. These documents explain what to look for and if those instructions have been followed and everything is correct, then you’ll know the discrepancy is in payroll.
As you are following this document you may find you need to make manual journal entries. Keep a list of all of the manual journal entries you will need to make and a detail description of why they are needed. Then at the end make all the manual journal entries at one time.
You will need the Check Account report printed when reconciled to the bank statement for the month your balancing
- You will also need the G/L Trial Balance
With DETAIL for the checking account G/L account number, for the month balancing.
On the G/L Trial Balance report you will see debits & credits with the SOURCE column of A/R, A/P and P/R. You must verify the transactions from payroll - P/R.
If using the payroll module, go into the payroll module, Employee Check History (Task 18), Print Selected Records (Sub-task 4). Print a report for the month you are working on, for all employees, all divisions. This report will be in employee # order.
- Go to the last page, to the “Grand totals:” and look for the column “NET-PAY”.
- Go to the G/L Trial Balance report for the checking account G/L #. Look for any debits and credits with the “P/R” in the “SOURCE” column. Sum up the total of all the P/R debits & credits.
- Subtract the debits from the credits. This total should equal the “NET-PAY” from the employee payroll history report just printed.
- Take the payroll history report, and the Check Account report and verify each check # appears on both reports. The date and amount should be the same on both reports.
If you find any discrepancies, find out what the discrepancy is and make a manual journal entry. If needed, make corrections in the Payroll module –Employee Master, Employee Deduction History, etc..
If you don’t use the payroll module, but the payroll still comes out of the same checking account as A/P checks, you will need to get a list of the payroll checks for the month. The total of the payroll checks should be already in the G/L via a manual journal entry as a credit to the checking account G/L #. Verify the manual journal entry is for the correct amount.
Take the Check Account report and add up the payroll checks. Make sure the payroll checks on the Check Account equal the list of payroll checks from the outside payroll.
If they don’t equal, verify each check on the Check Account report. The date and amount should be the same as the outside payroll list.
If a discrepancy is found, determine what the discrepancy is and make a manual journal entry.
Take the Check Account report, go to the ‘totals’ page and subtract from the PAID OUT figure the amount of the payroll checks for the month. The PAID OUT minus the Payroll is the amount of the A/P checks for the month. You may go to the document titled “Balancing G/L Check Account with A/P Task 20 – One Division” or “Balancing G/L Check Account with A/P Task 20 – Multiple Divisions”. Use the PAID OUT figure minus the payroll to follow the A/P instructions on either of these documents.
After the correcting manual journal entries are posted, print a new G/L Trial Balance for the Check Account G/L account #. If the ending balance is still off to the CHECKBOOK BAL on the Check Account report, verify that the correcting manual journal entries were entered and posted correctly.
You will need to verify the previous month’s amounts balance. If the previous month is off too follow these procedures for the previous month. The goal is to have the same CHECKBOOK BAL on the Check Account report & the same ending balance in the G/L’s Check Account.
If you find you are off several months in a row the exact same amount, you might want to make a manual journal entry to MAKE the G/L balance to the CHECKBOOK BAL. Then after the balancing journal entry is posted, the balancing should be to the penny every month. We recommend consulting with your accountant before making this Balancing journal entry.