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BANK RECONCILIATION TIP

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Jane Scharringhausen Posted: Fri, Jun 23 2006 2:03 AM

Upon first accessing the month's bank reconciliation, all entries have been marked as cleared by default.  You can unclear all checks, leaving all receipts as cleared, by clicking on the "Find & Mark" option at right side of screen.  At the message, "Would you like to deselect all checks?", click "Yes".  Then just close the next window that appears, relating to searching for a check.

Since most receipts clear, it is easier to unclear those few which have not cleared - usually deposited the last day of the month.

Sort your entries according to what is most helpful, i.e., date, amount, check #, etc., by clicking on the column title.  You can go back and forth to sort differently at any time. 

If your firm experiences client payments returned NSF, banks acknowledge the deposit and treat the returned NSF check as a withdrawal.  Here's a procedure that will accurately handle this situation: 

   1) On the date of the NSF, enter a Receive Payment or General Retainer (whichever the receipt was) as a NEGATIVE amount, allocating to the matter, with the Explanation - "returned NSF";

   2) On that same date, enter a Firm Receipt in the positive amount of the NSF receipt, no matter allocation, GL 9999.

   3) On that same date, enter a General Check (check # NSF, or whatever), in the positive amount of the NSF, no matter allocation, GL 9999.

Clear the positive and negative receipts, per 1 & 2 above.  Clear the general check, per 3 above.  This accurately corrects the client ledger, as well as creating a "withdrawal"/check to clear on the bank reconciliation, following the bank statement.

 

 

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