Identifying and Entering Bank Errors - Overview
A bank error appears as a New Error on the Bank Reconciliation Report. When you identify a bank error on your bank statement, and you verify it with your financial institution, you can enter a New Error in the Bank Reconciliation window. A New Error only exists in the Bank Reconciliation tool and does not post to the Bank Journal or General Ledger. A New Error does not appear on the Bank Reconciliation window for you to mark as cleared during the current period. The error adjusts your statement balance for the current reconciliation allowing you to reconcile as normal and carries the error forward to the next period. The error does not appear during the current period because if you clear the error during the same period that it occurs, it indicates that the bank corrects the error before the end of the period resulting in a net zero effect on the bank statement balance. You only need to enter a New Error when the bank does not correct the error prior to the end of the bank reconciliation period in which it occurs.
Do not enter a New Error to correct a bookkeeping mistake in the program. Correct any entries on your Bank Journal that you record for the wrong amount through the Register or by entering additional adjusting entries. When you enter a New Error for something other than a bank error, the program adjusts the statement balance and carries it forward to the next period. This prevents your ability to reconcile subsequent months without entering additional errors for each month.
Take the following steps to add a new bank error in the Bank Reconciliation window:
- Click New Errors... to open the Bank Reconciliation - Bank Errors window:
- Take either of the following actions if the bank made an error on a check that you wrote during the reconciliation period:
- Enter the date of the error in the Date column, and enter a positive amount in the Check column if the bank under-valued the check (bank cleared the check for less than you actually wrote the check.)
- Enter the date of the error in the Date column, and enter a negative amount in the Check column if the bank over-valued the check (bank cleared the check for more than you actually wrote the check.)
- Take either of the following actions if the bank made an error on a receipt:
- Enter the date of the error in the Date column, and enter a negative amount in the Receipt column if the bank under-valued the receipt (bank cleared the receipt for less than you actually received.)
- Enter the date of the error in the Date column, and enter a positive amount in the Receipt column if the bank over-valued the receipt (bank cleared the receipt for more than you actually received).
- Repeat steps two and three until you enter all of your new bank errors that the bank did not correct as of the end of the reconciliation period.
- Click OK to return the Bank Reconciliation window.
Click OK to return to the Bank Reconciliation - Bank Errors window and remove or change the dates of any errors that do not fall within the bank reconciliation period if you get the Enter a date before the closing date prompt. If this is your first bank reconciliation for the account and the bank error occurs prior to the first day of the reconciliation period, refer to Entering Bank Errors for Your First Bank Reconciliation Period.