Cash Reconciliation Overview

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Overview

The Cash Reconciliation function allows you to reconcile the transactions and balances record for Veracross general ledger cash accounts to the statements periodically received from the bank.  This function allows you to mark checks and deposits as “cleared” and to record miscellaneous transactions that appear on your bank statement for items such as interest earned and bank transaction fees.

Each reconciliation process is assigned a unique batch number, and this batch number is assigned to receipts and disbursements posted to the cash account during the period noted on your bank statement.  The system allows you to assign the batch number to a group of transactions in a single step, or you can assign the batch number to one transaction at a time.  The system also allows you to remove the batch number, as necessary.

As you assign and/or remove the batch number to transactions, the system will automatically calculates the difference in balance amounts recorded on your bank statement in Veracross.  When this difference nets to zero, you will have successfully reconciled your cash account for that period.

After a successful reconciliation, the Veracross batch must be marked “complete” to allow for the initiation of new batches when future bank statements are received.

The Cash Reconciliation Display

Cash Reconciliation

Cash GL Account: a required field that specifies the general ledger account associated with the bank account being reconciled.

Beginning Statement Date: the start date for transaction activity.

Ending Statement Date: the end date for transaction activity.

Statement Beginning Balance: account balance at the start of the statement period.

Statement Ending Balance: account balance at the end of the statement period

Complete?: status flag indicating whether or not reconciliation for a specific account and statement period is complete.  When this is toggled to yes, the system will disallow any attempted updates to the batch.

Fields in the “GL-to-Statement Balance Recon” section of the display are used to compare the ending cash balance reflected on the bank statement to the GL account balance recorded in Veracross as of the statement ending date.   Of course, the actual cash balance in Veracross will seldom match the amount recorded on your bank statement because there will almost always be transactions recorded in Veracross that have not yet been recorded by the bank.  The most common of these transactions will be checks cut in Veracross that have not yet been cashed by vendors.  The purpose of this section of the display is to aid in identifying transactions that cause differences in the balances.

Cash Ending Balance: general ledger cash account balance as of the Ending Statement Date (as calculated by the Veracross system).

Outstanding Deposits: total amount of uncleared cash receipts for the specified cash account with posting dates on or before to the Ending Statement Date.

Outstanding Disbursementstotal amount of uncleared cash disbursements for the specified cash account with posting dates on or before the Ending Statement Date.

Adjusted Cash Balance: resulting total of Cash Ending Balance less the total Outstanding Disbursements plus the total Outstanding Deposits.

Balance Reconciliation: the difference between the Statement Ending Balance and the Adjusted Cash Balance.  This represents the net of all transactions recorded in Veracross but not yet recorded by the bank.

Fields in the “Net Period Activity Recon” section of the display are used to compare the sum of all transactions reflected on the bank statement to the transactions recorded for the associated GL account during the same period.  The goal is to appropriately record and mark transactions in Veracross so that the Period Reconciliation field results in a $0 value.

Cleared Deposits: sum of cleared cash receipts associated with this reconciliation batch.  Most bank statements will provide a total of deposits made during the statement period.  As you designate cash receipts as “cleared” in Veracross, the value in this Cleared Deposits field will be incremented.  As part of the reconciliation process, you should be able to match the value in this field to the total deposits value printed on the bank statement.

Cleared Disbursements: sum of cleared disbursements associated with this reconciliation batch.  In a manner similar to that described for Cleared Deposits above, you should be able to match the value in this field to the total withdrawals value printed on the bank statement.

Total Cash JE Amt: sum of journal entry line items applied to the specified cash account during the statement period.  The only items included in this sum are from manual journal entries, payroll accruals or other payroll entries. The “posting date” of these journal items is used to determine if they fall within the statement period.

Deposits via Transfers: sum of disbursement items where the debit account is the cash account being reconciled.  This transaction would represent a check written from a different account with the money being deposited into the account being reconciled.

Withdrawals via transfer: sum of any cash receipt items where the credit account is the cash account being reconciled.  This transaction would represent a check deposited in a different account with the money being withdrawn from the cash account being reconciled.

Period Reconciliation: resulting total of Statement Ending Balance minus the Statement Beginning Balance less the sum of Cleared Deposits (regular and via transfers) minus Cleared Disbursements (regular and via transfers) plus Total Cash JE Amt (manual and/or payroll journal entries) plus Deposits via Transfer less Withdrawals Via Transfer.   This represents the difference in net period activity amounts recorded in Veracross and the net period activity recorded on the bank statement (calculated by subtracting Statement Beginning Balance from Statement Ending Balance).

The fields listed under the sections titled “Mark Disbursements” and “Mark Deposits” are utilized when a user wishes to mark as “cleared” groups of bank withdrawals and deposits made during the bank statement period.  These processes will be described in the articles below.

Read more about How to Create a Cash Reconciliation Batch here.

Read more about How to Open an Existing Cash Reconciliation Batch here.

Read more about How to Mark Disbursements as Cleared here.

Read more about How to Mark a Range of Checks as Cleared here.

Read more about How to Mark a Range of Checks as Uncleared here.

Read more about How to Mark Deposits as Cleared here.

Read more about How to Refresh Bank Reconciliation Totals here.

Read more about How to Complete a Reconciliation Batch here.