Bank Reconciliation. MaddenCo Inc. Revised March Copyright 2017 by MaddenCo, Inc All rights reserved.

Bank Reconciliation MaddenCo Inc. Revised March 2017 Copyright 2017 by MaddenCo, Inc All rights reserved. 1

Please understand that MaddenCo has expended substantial sums in developing and maintaining its software, systems and related materials, and as a result, it has and will continue to have substantial proprietary interest and valuable trade secrets therein. Also understand that MaddenCo's software, systems, related materials and the "ideas" represented by software, as well as the physical materials, are valuable trade secrets and are strictly confidential material, and important, and that its confidentiality gravely affects the successful conduct of the business of MaddenCo. 2

INTRODUCTION... 5 BANK RECONCILIATION SET-UP... 6 ACCOUNTS PAYABLE CONTROL FILE... 6 TIRE DEALER CONTROL FILE... 6 STORE TENDER CODE MAINTENANCE... 7 BANK RECONCILIATION MENU... 9 BANK RECONCILIATION INPUT... 10 Display an entry... 12 Change View... 12 History... 13 Print List... 13 Show only... 14 Open/Cleared Transaction Code... 14 Transaction Code... 15 System Code... 16 Deposits... 17 Cash Receipts... 18 Source Code... 19 Add Miscellaneous Entry... 21 BANK RECONCILIATION JE UPDATE... 23 Clearing a Miscellaneous Entry... 23 Updating the Miscellaneous Entry... 24 Journal Entry from Miscellaneous Transaction... 25 BANK TRANSFERS... 27 BANK RECONCILIATION UPDATE... 30 Clearing records to the bank account... 30 Clearing a transaction for a different amount... 31 Adjustment Entry... 33 Balance and Update Bank Account... 35 Statement Ending Balance... 35 Out of Balance Entry... 37 BEGINNING BALANCE INPUT... 39 BANK RECONCILIATION PURGE... 40 3

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Introduction The Bank Reconciliation feature posts cash transactions created by MaddenCo s other systems. This document discusses how the various MaddenCo systems create postings to be updated to the Bank Reconciliation and how to manage the data to balance your checking account(s). This document explains how to implement the feature as well as how to manage the data. 5

Bank Reconciliation Set-up The Bank Reconciliation feature is similar to the Check Reconciliation feature but with added features. The Bank Reconciliation feature can capture the A/P checks updated, and voided by the system, total cash receipts, cash deposits for each store and credit card deposits for each store, all by bank code. To begin using the Bank Reconciliation feature, the following control records will need to be set up in the Accounts Payable and Tire Dealer System control files. Accounts Payable Control File BNKRCONL Y or N whether to use the Bank Reconciliation feature. This control record will need to be setup in both the A/P and the Tire Dealer System Control file. APCASH99 Where 99 is replaced with a two-digit bank code number. Contains the GL account number for cash postings to this bank code. BANKCODE Contains the default bank code when you update (print) checks. BANKC999 Where 999 is replaced with a store number. Contains the default bank code when you update (print) checks from this store number. Tire Dealer Control File BNKAJ99 Where 99 is replaced with a bank code. Contains the GL account number for adjustments. See adjustment section for more information. BNKRCONL Y or N whether to use the Bank Reconciliation feature. This control record will need to be setup in both the A/P and the Tire Dealer System Control file. BNKCOD99 Where 99 is replaced with a bank code. Contains the name of this bank code. Example: First Bank of Somewhere (#123456) BNKRCSHR Y or N to post cash receipts to the bank reconciliation. Control record POSY/N should be set to N if this control record is set to Y. BNKRCSHB Contains the bank code to post cash receipts. BNKGL99 Where 99 is replaced with the bank code. Contains the GL account number for miscellaneous GL postings to this bank code. See miscellaneous GL entries for more information. BNTxxxxx Where xxxxx represents a transaction code. Contains the description for this bank transaction code. Example: Bank fees. BRCCxxxx Where xxxx represents a credit card tender. Contains the bank code to use when posting credit cards from the cash drawer balancing to Bank Reconciliation. Control key TOTLBCCC contains the default bank code for all credit card tender types. POSY/N Y or N to whether to add cash receipts totals to the POS cash drawer. If set to Y then the cash deposit will be posted to the bank reconciliation if control record TOTLBNKR is set to Y. 6

TOTLBCCC Contains the bank code to use for all credit cards when balancing the cash drawer and posting credit cards to Bank Reconciliation. This will keep bank codes separate from cash deposits. To set a bank code per credit card tender, see BRCCxxxx. TOTLBNKR Y or N whether to post the POS cash drawer deposit to the bank reconciliation. TOTLCASH Y or N whether to use the bank deposit feature when you balance the cash drawer. TOTLBANK Contains the bank code to be used for cash deposits and can be set by store. TOTLBNKS Y or N to write deposits and credit card totals to Bank Reconciliation when closing by salesman. TOTLBRCC Y or N, whether to post credit card totals to Bank Reconciliation. Note: You must have the credit card tender types flagged with a Y in the Credit Card Type YN field in Tender Master Maintenance. If you do not want to collect credit card numbers, expirations and authorization numbers for credit cards, then you will need to answer this control record with a T and make sure the Credit Card Total field is answered Y in the Store Tender Master Maintenance. Store Tender Code Maintenance If you are using the Bank Reconciliation feature and you want credit card amounts to post to Bank Reconciliation set control key TOTLBRCC to Y. For your credit card tender, the Non-Cash Depositable must be set to N and Credit Card Total must be set to Y. When balancing the cash drawer and you are using the feature to post credit cards amounts to bank reconciliation, now a different bank code can be used than what is used for the cash deposit. For all credit cards, the control record TOTLBCCC contains the bank code to use. If you need a different bank code for say Discover, control key BRCCxxxx (where xxxx is the tender code for Discover) contains the bank code to post the deposits for that tender. 7

Credit Card Type when set to Y will display a popup screen when closing an invoice in Point of Sale to capture the authorization code and expiration date. This option is used when authorizing through credit card companies or using the swipe feature to approve credit cards. The information can also be manually entered. If you are not authorizing credit cards and do not want to have the popup screen to capture credit card information, in the Credit Card Tender, set Credit Card Type to N, and Credit Card Total to Y. And, set Tire Dealer control key TOTLBRCC to T. 8

Bank Reconciliation Menu From the starting menu take the Check Reconciliation option. If control key BNKRCONL is answered with a Y, then the system will take you to the Bank Reconciliation Menu. 9

Bank Reconciliation Input Take the Bank Reconciliation Input option. Enter the bank code that you want to work with. A Prompt function is available to select a bank code. 10

The above screen will appear with the bank account information. At the top of the screen you will see the bank code and bank name listed. Notice that the Beginning Balance for the period is displayed as well as the Ending Balance and Cleared Balance near the bottom of the screen. The entries are presented in transaction date, transaction code order. From here, a transaction can be flagged as cleared, a memo can be added to each transaction and additional information can be displayed about a transaction. The only transactions that can be Edited presently are the miscellaneous G/L entries and are discussed later. 11

Display an entry The Display option shows the transaction detail. Change View The Change View function will change the view to display transaction source and description. The credit card deposits are listed by source and show as VISA/MASTERCARD or AMERICAN EXPRESS. 12

History To view transactions from a closed period, use the Show History function. Enter a transaction date or use the Search By function and switch to search by Reconcile Date. Print List A report can be printed using printer control key 1411. 13

Show only The top portion of the screen is a show only section to allow you to select which records you want to display. Open/Cleared Transaction Code The system defaults to show only OPEN items. You can change the Open/Cleared Trans field to show CLEARED items only for the period or to show BOTH. A date range is available to narrow the transactions down as well. 14

Transaction Code Use the Prompt function to display a list of valid transaction codes. The transaction codes in lower case are system maintained values. The transaction codes in upper case are customer codes that can be set up by adding control record BNTxxxxx in the Tire Dealer System control file. You will replace xxxxx with a transaction code up to five characters long and the value of this control record will be the description of this transaction code. In the Bank Reconciliation feature, at times it will be necessary to input miscellaneous amounts. These amounts could be bank fees or manual deposits. The bank transaction code will be used to identify what type of miscellaneous amount is being input into the Bank Reconciliation feature. You can set up unlimited different transaction codes In the example above you can see BANK FEES was added as a custom transaction code. Transaction code A/P Checks will include all checks from accounts payable including regular checks, manual checks and voided checks. Transaction code Deposits will include cash deposits entered in POS cash drawer balancing and all credit cards that we are posting to the Bank Reconciliation. Transaction code Cash Receipts will be all checks run through the Cash Receipts program if we are posting directly to the Bank Reconciliation file. Control key BNKRCSHR is set to Y and POSY/N is set to N. 15

System Code There are also system codes that can be prompted to isolate information using the Prompt function. By selecting one of the system codes, the system will display only records from that system. 16

Deposits Above you will see only deposits, which include cash deposits as well as credit cards processed. In this case, this is a cash deposit for $87.64 entered in the system on 7/02/12. 17

This one above is a deposit for Visa/Mastercard of $104.45 on 7/02/12. Cash Receipts Above you see only cash receipts that have posted. Cash receipts could be included in deposits if you are accounting for them when balancing your cash drawer. These control keys were discussed earlier. 18

Source Code Here you can isolate the AP checks to see only manual checks or void checks. The tender types available at any store are displayed in the list. Tender Types can also be used to show only such as, American Express deposits. Above you see only AP manual checks that were processed and printed through the system. 19

Above you see only Visa / Mastercard deposits. This is a great way to balance your credit card statements. Any fees collected by the credit card company would be a good example of a miscellaneous entry that would need to be entered to balance the bank account. 20

Add Miscellaneous Entry Use the Add Misc function to add a miscellaneous entry such as a bank charge. A Prompt function can be used to select the Transaction Code if needed. Select either a Debit or Credit account. This is how it will post to the general ledger, not how it posts to the actual bank statement. Here, we are crediting the cash general ledger account for the bank fee, but it would show up as a debit to the bank account. Then enter the amount, transaction date, change the year/period if needed, enter a description of the transaction, enter or Prompt for the GL account that this will be expensed and the payee. 21

The transaction is added with a status of OPEN. To post it to the GL, we will need to clear it and then update it. This will be discussed next. 22

Bank Reconciliation JE Update Clearing a Miscellaneous Entry First we will clear the transaction from the bank by taking the Cleared option. Notice that we have cleared transaction reference number 200 for July bank fees. 23

Updating the Miscellaneous Entry Use Bank Reconciliation JE Update option on the Bank Reconciliation menu to post the transaction to the general ledger. You will need to enter the bank code that you wish to update. 24

The system will update all miscellaneous GL entries that have been cleared. The update creates a journal entry to post the entry to the general ledger system. Note: No separate journal entry needs to be made for the entry. Any entries that affect the bank need to be processed through the Bank Reconciliation so that we not only keep the bank account in balance, but also keep the general ledger updated correctly as well. Let s take a look at the journal entry created by the update in G/L Outstanding Journal Entry Journal Entry from Miscellaneous Transaction The system has created a journal entry to post the entry to the general ledger. You will notice that the description has been carried over to the journal and the status is Ready. 25

By editing the journal, you will see the entire posting made by the entry. When updating a miscellaneous journal entry, the division and department of the G/L account from the expensed portion of the entry is used for the offset. The G/L account is taken from BNKGL99 where 99 is the bank code. In some cases, you may want the division and department to be different from the expensed side for a bank code. If control record BNKGDVDP is answered with a value of Y, the division and department will be pulled from the existing BNKGL99 control record. The division and department will need to be added to the bank G/L key BNKGL99. For example, bank code 01 with the value of 00100001000, the G/L account of 00100 will be used with a division of 001 and a department of 000. 26

Bank Transfers Funds can be transferred from one bank account to another using the Transfer function. Transfer from the bank account that you want to transfer funds. The FROM bank is filled in and protected. Enter the TO: Bank Code in the field above. Then enter the amount. The date and the year/period will default to the system date but can be changed. Enter a description and the correct general ledger accounts for the FROM and TO bank accounts. 27

When you process the transfer, you will presented a screen to verify that you wish to continue with this transfer. The transfer is displayed for the FROM bank code. Notice that the dollar amount is a negative amount for this bank account. 28

The amount is also shown for the TO bank code. To complete the transfer and post to the general ledger, you will need to clear these transactions from each bank when completed and run the Bank Reconciliation JE Update that was discussed previously in this document. 29

Bank Reconciliation Update Clearing records to the bank account All transactions in the Bank Reconciliation feature will post as OPEN until you flag the transaction as cleared. To clear the transaction, use the Cleared option. Note: The amount of the Cleared Balance above, before we use the Cleared option. 30

The check now has a status of cleared and the Cleared Balance has changed. It is the Cleared Balance that we will be trying to balance to our bank statement for the period. Clearing a transaction for a different amount Sometimes we may need to clear an entry for a different amount. For example, a deposit sent to the bank cleared for an amount different than what was updated to the Bank Reconciliation file. 31

Use the Adjustment option to clear this entry with an adjustment. Input the amount cleared for this entry. The system will ask if we want to create an adjustment entry. 32

Adjustment Entry The adjustment entry will be created. The control record BNKAJ99 (where 99 is the bank code) contains the default G/L account to use for the adjustment entry. Selected fields can be modified at this point. If you decide you don t want to create the entry, use the Cancel function from this screen and the entry will not be created and the original entry will not be cleared. 33

The transaction and the adjustment transaction are displayed as cleared. 34

Balance and Update Bank Account After clearing all transactions for the period and balancing the bank file to our statement we will update the system to close the period and move the cleared ending balance forward to the beginning balance for the next statement period. From the Bank Reconciliation menu, take option Bank Reconciliation Update. Enter the bank code to update. Statement Ending Balance The system will display a screen to enter your statement ending balance. Enter the statement ending balance and the statement ending date. 35

You will notice if we display bank code 17 again, then the new beginning balance was our previous statement ending balance. 36

Out of Balance Entry In this case our statement ending balance is off by a small amount and we were unable to find the problem and just want to close the statement period. You will be ask if you wish to create an adjustment entry to bring the bank into balance. Answer Y to continue or if answered N, the update is cancelled. 37

We will now need to enter a transaction code and general ledger account number to post the variance. The debit/credit and amount will be filled in for you After completing the input of the adjustment entry, you will return to the reconciliation update screen. The ending balance will be recalculated and compared to the bank statement balance. If in balance, the reconciliation update will continue. A report will be generated listing the transactions that were flagged as reconciled. 38

Beginning Balance Input This option allows you to input the beginning balance for each bank code. This should only need to be done once at the startup of the Bank Reconciliation feature or whenever a new bank code is added. You will be prompted for a bank code, the beginning balance amount and a transaction date. The beginning balance is now set for the bank account. 39

Bank Reconciliation Purge The Bank Reconciliation Purge will delete all reconciled entries as of the date that you select, as well as any occurring reconciled entries prior to that date. Once selected, a message is displayed indicating reconciled entries will be removed. You would need to answer this with Y to continue or N to cancel. 40

After answering Y, you will go to the screen that will ask you what bank code you would like to use. Now the feature will ask you for a system code. If you do not know the system codes use the Prompt function to Select the code you would like to use. 41

On the next screen, you will put in a date that you would like to start from and anything on and before that date will be purged from Bank Reconciliation. The date is written to control key &BNKRC99 for recording the last purge date for the bank code represented by 99. 42