8.0 BANKING. 8.1 Overview. 8.2 Multiple Bank Accounts Funds Transfers Cancelling a Funds Transfer

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1 8.0 BANKING 8.1 Overview As you enter receipts from your customers and payments to your suppliers and expense accounts, Payperwork automatically updates the relevant bank account. The default bank account is setup in [Setup/Accounts] and this account is automatically updated for you as you enter receipts and payments. If you have just the one bank account, you never need to change the default account. At the end of each month (this can even be done daily), you need to compare the transactions and balance of your bank account in Payperwork with the transactions and balance of statement from the bank. This is called bank reconciliation and it ensures that you have entered ALL the transactions that went through the bank, thereby verifying your figures with an outside source (the bank). 8.2 Multiple Bank Accounts Payperwork allows you to set up an unlimited number of accounts that are nominated to be bank accounts. If an account is marked as a bank account, the program will generate separate bank deposit, cash book and bank reconciliation reports. Examples of other bank accounts are Bankcard, Credit Cards, and Investment Accounts. Bank accounts do not involve the GST therefore none of the GST boxes should be ticked. For more information on setting up a new bank account please see page Funds Transfers When operating using multiple bank accounts, use this option to transfer funds between bank accounts. This is to ensure that a receipt is recorded in the To account and a payment is recorded in the From account. GST is not applicable when moving funds between bank accounts. Click on the [Banking] toolbar. Click on the [Funds Transfer] button. From: Enter the From bank account i.e. the bank account the money is coming out of, by clicking the magnifying glass button. To: Enter the To bank account i.e. the bank account the money is being transferred into, by clicking the magnifying glass button. Cheque Number: If you are transferring the money by cheque, enter the cheque number here. Date: Enter the date the transfer was on. Payment Type: Click the arrow on the drop down box to select the method of the payment. E.g. Cheque, Direct Deposit, Credit Card or Cash. Details: enter the details of the transfer. E.g. Paid Visa Card. Value: Enter the value of the funds transfer. Notes about Funds Transfer Funds Transfer utilises the suspense account to convert a payment into a receipt. If you do not have an account set up to be the suspense account in [Setup/Accounts], you will be prompted to set this up. For more information on setting this up please see page Cancelling a Funds Transfer For the purpose of the bank reconciliation, the Funds Transfer facility in Payperwork uses the Suspense account to create a payment in the From account and a receipt in the To account. Therefore if you need to cancel or delete a funds transfer you will see two transactions (a receipt and a payment) in the cancel receipts and payments screen. You will need to delete both these transactions to remove the funds transfer completely. When you delete one side of a funds transfer, Payperwork will prompt you to delete the other side of the transfer. Page 238 of 301

2 8.3 Cancel and Edit Receipts and Payments Any errors made during receipt and payment entries can be fixed by cancelling the receipt or payment and re-entering the correct details. If you need to edit the date, bank or details of the receipt or payment this can be done by editing the entry not deleting and re-entering it Cancel Receipts and Payments Click on [Cancel Receipts and Payments]. Select the month in which the incorrect receipt or payment was entered. The screen is divided into two sections. The top section lists the individual receipts and payments. The bottom section is the lines each receipt and payment is broken down to. Click on the receipt or payment to be cancelled in the top section of the screen. It will then be highlighted in blue. In the bottom section of the screen you will see the detailed breakdown of that receipt. Click on [Delete] and all lines of the entry will be deleted. Click on [Finish] and return to either receipts or payments to re-enter the correct details. REMEBER: If the receipt or payment that you delete and re-enter was previously tagged on the bank reconciliation, you will need to go back to the bank reconciliation and re-tag the receipt Edit Date Click on [Cancel Receipts and Payments]. Select the month in which the incorrect receipt or payment was entered. The screen is divided into two sections. The top section lists the individual receipts and payments. The bottom section is the lines each receipt and payment is broken down to. Click on the receipt or payment to be edited in the top section of the screen. It will then be highlighted in blue. In the bottom section of the screen you will see the detailed breakdown of that receipt. Click the [Change Date] button. Select the correct date for the transaction and click [OK]. Click on [Finish] Edit Description Click on [Cancel Receipts and Payments]. Select the month in which the incorrect receipt or payment was entered. The screen is divided into two sections. The top section lists the individual receipts and payments. The bottom section is the lines each receipt and payment is broken down to. Click on the receipt or payment to be edited in the top section of the screen. It will then be highlighted in blue. In the bottom section of the screen you will see the detailed breakdown of that receipt. Click the [Change Details] button. Enter the correct details for the transaction and click [OK]. Click on [Finish] Edit Bank Account Click on [Cancel Receipts and Payments]. Select the month in which the incorrect receipt or payment was entered. The screen is divided into two sections. The top section lists the individual receipts and payments. The bottom section is the lines each receipt and payment is broken down to. Click on the receipt or payment to be edited in the top section of the screen. It will then be highlighted in blue. In the bottom section of the screen you will see the detailed breakdown of that receipt. Click the [Change Bank] button. Select the correct Bank for the transaction and click [OK]. Click on [Finish]. Page 239 of 301

3 8.4 Dishonour Receipts and Payments If a customer sends you a cheque which you deposit into the bank and enter into the program and this cheque subsequently is returned, the entry can be reversed. Click on [Dishonoured Receipts and Payments]. Select the month that the original receipt or payment was entered. The screen is divided into two sections. The top section lists the individual receipts and payments. The bottom section is the lines each receipt and payment is broken down to. Click on the receipt or payment that bounced in the top section of the screen. It will then be highlighted in blue. In the bottom section of the screen you will see the detailed breakdown of that receipt or payment and the invoices that the receipt or payment paid. Click on [Dishonour]. Payperwork will get you to confirm that you would like to dishonor the receipt or payment. Click [OK]. Change the date to the date that the cheque was debited back to your bank account. The program will create a reversal entry that is equivalent to a negative receipt. It will also mark the invoice(s) as outstanding again. 8.5 Bank Deposit Listings If you have a large number of receipts, the program can print a bank deposit list to save manually writing it out. Most banks will accept the cheques listed by computer on plain paper provided that the list is accompanied by the encoded bank deposit slip. Click on [Reports]. Click on [Bank Deposit]. Select the date required by clicking on the calendar button. This could be a range of dates if you are using the immediate receipting option in invoicing. Bank Account: Select the bank account you require by clicking on the magnifying button and select from the list. If you require a report for all bank accounts tick [All]. All the receipts for the day are listed with the cheque details as they have been typed into the receipt header. Refer to receipts: Header details. Note that for cash to be listed separately the word Cash is to be typed in the beginning of the cheque details field. Page 240 of 301

4 8.6 Bank Reconciliation This is the comparison between the business Cash at Bank account activity and the Bank Statement. Performing and balancing a Bank Reconciliation ensures that your figures match with the statement that you receive from the bank. When you balance the bank reconciliation at the end of each month (or even every week if required), you can be confident that the figures you have entered are correct. WARNING The program cannot ascertain whether you have selected the correct accounts when entering payments and receipts. By adding details during payments and receipts and then by printing an account activity report for your accountant, he or she will be able to check that you have been posting to the correct accounts. If you do not have bookkeeping experience, ask your accountant to guide you as to the correct accounts to use when entering information. You enter receipts and payments during the month into Payperwork. When you do this the Cash at Bank control account is updated automatically. When you do a Bank Reconciliation you are comparing the Cash at Bank account with your bank statement Un-Presented Receipts and Payments By marking off (tagging) in Payperwork those transactions that appear on the bank statement, you will be left with some payments and maybe some receipts that have been entered but do not yet appear on the bank statement. These are called Un-Presented receipts and payments. When you enter the final balance from the bank statement, Payperwork will tell you if you balance with the bank or by how much you are out. A report, according to Payperwork, can then be printed for filing that shows the opening and closing balances with a list of the Un-Presented payments and receipts How to Tag, Balance and Print the Bank Reconciliation Click on the [Banking] toolbar. Click on the Bank Rec. button. Bank Account: If you are using multiple bank accounts, click on the magnifying glass and select the bank account to be reconciled. Leave this unchanged if you have only one bank account set up. First enter any direct debits from the bank statement through [Payments]. Month: Click on the down arrow and select the month to be reconciled. You are now ready to mark the transactions on your bank statement with the matching transactions on this list. Mark each transaction on your bank statement with a pencil tick, as you locate and Tag the matching transaction on this list. Receipts and payments are listed with their dates, Cheque numbers, details and amounts. Page 241 of 301

5 8.6.3 Bank Reconciliation: Tagging Transactions Click once with the right mouse button on the first transaction to be tagged. A tagged transaction is marked with a tick in the Tag column. Continue until all entries that appear on the bank statement have been tagged. If you find any discrepancies, such as transactions that you have not entered or incorrect amounts, you can make the necessary adjustments by clicking on the [Receipts], [Payments] or [Delete] button. For more information on entering receipts please see page 187. For more information on entering payments please see page 225. For more information on editing receipts and payments please see page Balancing the Bank Reconciliation Enter the final figure from the bank statement in the box marked [Bank Statement] at the bottom right of the screen. If the Bank Statement figure is in Overdraft, enter this figure as a minus value. The reconciliation is balanced when the difference shown in the box marked [Difference] is Zero. Print: Print the reconciliation report and file with the bank statement. This will detail the figures involved in the balancing and list the unpresented payments and receipts for future reference. Un-Presented payments and receipts (i.e. un-tagged), will be carried forward into the next and subsequent months reconciliations to be tagged in the month that they are presented on the bank statement. Do not return to a previous month to tag a transaction once the reconciliation has balanced. This also applies at the end of the financial year, when the un-presented transactions will be carried over into July. Page 242 of 301

6 8.7 Creating ABA Files What is an ABA File? An ABA file is a file accepted by many banking institutions, which enables your bank to process multiple payments and electronically transfer funds from your bank account into your suppliers nominated bank accounts. Some banks may refer to this feature as Bulk Payments. You will need to contact your bank to setup this facility and obtain a User ID number and User name. You will also need to determine whether they require a Balancing entry in the ABA file Setting up ABA within PPW You need to supply PPW with certain information for each Bank Account that you wish to be able to create the automatic payment file (ABA). To do this, go to [Adjustments / Accounts / Name and Group] and select (or create) an account an Account that has been set up as a Bank Account (i.e. with the Bank Account checkbox ticked). All Bank Accounts will have a BANKING Tab. Click on this tab and carefully fill in the Account Name, BSB and Account No details. You must select the correct Bank Abbreviation for your bank (e.g. CBA for the Commonwealth Bank). You will also need to enter the User Identification Number and User Name supplied by your bank when you applied to use their Bulk Payment facility. It is also important that you determine whether a balancing entry is required in the file or not. For example the Bendigo Bank does NOT want a balancing entry, whereas both the Commonwealth Bank and NAB DOES require a balancing entry. Don t forget to SAVE! Now that you have set up this information for EACH bank account that you want to process in this manner, you are ready to adjust your Supplier s banking information Setting up your Suppliers Banking Information In order for PPW to create a file that your bank can use to process your payments automatically, you will need to save banking details for each of the suppliers you wish to pay in this manner. Go to [Adjustments / Suppliers / Names and Details] and select (or create) your supplier. Go to the Banking Details Tab and carefully fill in the Account Name, BSB and Account No. details. Don t forget to SAVE! Repeat for each supplier you require Creating an ABA file Now that you ve setup your banking information for your relevant Bank Accounts and suppliers, you re ready to create your ABA file! Enter the payments in the usual manner, selecting the suppliers and relevant purchases. At the main PPW screen, click on the Banking option to get the Banking Toolbar and select the ABA File button. In the ABA screen you will need to select a month. This will then show all payments for this month. You will notice that some payments might have a CROSS beside them (in the Tag column). You will NOT be able to select these payments for inclusion in your ABA file. You will also notice that beside each payment will be the Account details from which it will be paid. These details are highlighted in red and appear under the Transfer From heading. The Account details that the money will be deposited into appear in the green columns under the heading Transfer To. The Process Date is required by your bank, it is the date the transactions are released to all financial institutions. To select transactions to be included in your ABA file (or files if you have more than one bank account in use) you simply Right Click on the payment to TAG it. As each payment is tagged, you will notice that total amount that will be paid from your bank account (displayed at the bottom of screen) will changed accordingly. To UNTAG a payment simply Right Click in that payment again. When you are satisfied that you have all the payments selected that you require, and you have checked the SUMMARY table of bank accounts at the bottom of the screen is in order, you are ready to save the file. Simply click on the Save ABA File button in the toolbar. Doing this will create separate ABA files for each bank account you wish to transfer funds from. At this point you are given the opportunity to look at the information in the file. Take a note of the location of the file it will be displayed in the heading while you are viewing the file. Page 243 of 301

7 8.7.5 Processing the ABA file PPW s job here is now finished. THE PAYMENTS HAVE NOT YET BEEN PROCESSED. You will now need to log into your financial institutions internet site and follow the instructions that you have been given from them. At some stage, you will be required to nominate the file containing the payment information. This is when you use the location of the file (which includes the file name) that you wrote down earlier. Most banking software will give you an opportunity to view the transactions before they are processed. Carefully check that the details and amounts to be paid are correct. This is your responsibility! Troubleshooting Why can t I tag some payments? Payments that are against a General Ledger account rather than a supplier will not be able to be tagged. Neither will Payments to suppliers with no Banking Details. Simply go into adjustments for the relevant supplier and add the Bank Account information. Payments from a Bank Account without the ALL the required Bank Details will also not be able to be tagged. Payments that have been tagged in the Bank Reconciliation section of PPW will not be able to be tagged. These payments have obviously already appeared in your bank statement and do not need to be processed again! Why won t some bulk payments process? Some banks require a Balancing entry, and some don t. You need to make sure that each Bank Account in PPW has the Balancing checkbox saved correctly. After saving the Bank Accounts correctly, try making the ABA file again and processing with your bank. If the amount to be processed is negative, then the bank will not accept the payment. Ie. You cannot RECEIVE money from your suppliers in this manner. Obviously you can only process an ABA file for a Bank Account with the Financial Institution you are currently in! I.E. If you are in the NAB internet banking site, you cannot pick up the ABA file for your ANZ Bank Account. I can t find the ABA file I created. When you SAVED the ABA file, the location of the file and the file name were displayed at the top of the screen. You need to write down this information before proceeding to your Internet Banking site. Why did PPW allow me to select a payment I have already included in an ABA file? Until the payment is tagged in the Bank Reconciliation report, PPW has no way of knowing whether the payment you included in an ABA file was actually processed. You may have created an ABA file, and discarded that file and then wish to create another one including payments that were in the discarded file. My Bank doesn t know what I m talking about! Yes it would be nice if they all used the same terminology. Here s some helpful hints: NAB go to Funds Transfer and then select New Multiple Funds Transfer. There will be an option to import a Direct Entry File. Commonwealth In the ComBiz User guide, they refer to aba files as Importing and Using Direct Entry (EFT) file Westpac Direct Entry File Bendigo Bank Bulk Payments Page 244 of 301

8 8.8 Bank Opening Balance When you first start on Payperwork, you will need to enter an initial balance for the Cash at Bank account. Subsequent receipts and payments will add and subtract from the opening balance. Information that you will need Your closing bank statement balance from the previous month. Details of any un-presented payments or receipts from the previous month that are not included in that balance. To enter these go to: [Receipts] if your bank statement balance is in credit (CR). OR [Payments] if your bank statement figure is in debit (DR) or Overdraft. Date: Use either the last day of the previous month or the 1 st of the starting month. Details or Cheque No.: INITIAL BANK BALANCE Click on the [Accounts] button. Locate and select the account SUSPENSE TAKE ON BALANCES (ACC #999) Details: INITIAL BANK BALANCE Value: Enter the value from the bank statement. Click on [OK]. Click on [Finish] and [Yes] to save the changes. If any errors are made entering either the opening balance or the Un-Presented payments, you can delete and re-enter them correctly. See [Adjustments/Cancel Receipts/Payments]. This opening balance transaction will need to be tagged on the bank reconciliation. Un-presented payments and receipts. Any cheques written or monies banked that are not included on the bank statement up to the date of the opening balance, are entered through payments and receipts. Go to [Payments (or Receipts)] and instead of using the expense accounts, select the suspense account for these opening balances. Any cheques written or receipts received AFTER the starting date must be posted to customers, suppliers or expense accounts. [Refer to Receipts and Payments section of this manual. Page 245 of 301