ReconNET Intermediate Operator Bank to Book - LUIS - TRAIN-553

In this course we'll quickly review Bank to Book, an automated process for balancing your cash accounts.

Overview

Thinking of Bank to Book

Bank to Book begins with balances from two sources. Each balance is then adjusted by its outstanding items. For this course, let's assume the adjusted balance for each source match one another (see below) and the account is in balance.

How often is this report ran?

Once a month, typically month-end.


What information is available?

  1. A full list of outstanding items for each source (grayed out, top half of image)

  2. A summary section (bottom half of image)


How it works best

By reconciling your cash account daily you leave yourself very little reconciliation work at month-end. If so, Bank to Book is simply a report to run. Auditors find a full explanation of items that appear on one source and not the other. You might use this report for item aging, for those outstanding items that are on the report for quite some time.


Detail

Closing Cash

What steps are required?

There is some detail here we think will secure a happy month-end!

  1. Ensure source balances are accurate for the as-of date.
  2. Load all available items (validate no missing data from either source, i.e. file load issues, other).

  3. Make sure ReconNET created over/shorts and post to the ledger.
  4. Make sure bank transactions that aren't reflected in the POS (such as NSFs or bank fees) are properly handled.



    If any exceptions were found above, make the necessary adjustments (to balances) if needed.
     
  5. Run the report.

 

Take another look at the summary section:

 

Common question

"I know that Outstanding items are unmatched items on a given day. Their monetary value is used to get to an adjusted balance" (see example above). "But what happens with my matched items?"

Good question! What happens to items that are matched together during a daily reconciliation process?

Answer:

The amount becomes part of the balance, or balance activity.

EXAMPLE: A real-life match between 2 items goes; The bank has accepted my deposit. My GL disclosed that it's supposed to get that amount (so it's already booked in the GL). And once you have it in the bank, it's booked there as well. These transactions are accounted for—there are now no exceptions to be considered.

Easy to find

Bank to Book is easy to find.

  • It has its own category of reports
  • It's meant to be run at period-end
  • You can run it as a prelim or a Final

Show me

The following high-level video shows how simple it is to find and run a "Bank to Book".

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Q1

  • Ensure source balances are accurate for the as-of date
  • Load all available items (validate no missing data from either source, i.e. file load issues, other)
  • Make sure ReconNET created over/shorts and post to the ledger
  • Make sure bank transactions that aren't reflected in the POS (such as NSFs or bank fees) are properly handled
  • Run the report.
Place these in the correct order.

Q2

How do you get to and run a 'Bank to Book' (report)? Drag and drop the appropriate text boxes to the parts of the image where they belong.
  • Reports
  • Bank to Book
  • Final...

Bank to Book Rules

The Bank to Book Report is designed to recreate the status of the system as of a user-defined date by showing the adjusted balances of the bank and general ledger for that date.

It will also include in-transit items for the same 'as-of' date. But which items? Does it show reconciled items? Or only outstanding? 

Watch this video for a tutorial on these 5 rules.

There are five rules, or statements, that tell the system which items to include on a Bank to Book report, as-of a particular date. These are the same rules used in the Detail Proof report.

 

 

Q3

  • Both the Detail Proof and Bank to Book reports show outstanding, or in-transit, items.
  • The as-of date allows the operator to recreate the system status including the balances and any in-transit items as-of that date.
  • An outstanding item, that didn't exist prior to or on your as-of date, would be included in the report.

Find the one un-True statement.

Good luck~!

Key Ideas

Key Usage, Key Value & Key Considerations for Bank to Book

Key Usage

A part of the financial close, these reports are run once a period and kept for auditor's year-end audit.

Key Value

Automating the process of balancing cash accounts.

Key Consideration

Both balances and (all) items for each source must be loaded prior to running this report. You'll have quite a bit of reconciliation work at month-end if you don't reconcile these accounts daily.

Summary

Summary

What you know

  • Balances from both sources must be entered.
  • All items from both must be loaded.
  • Bank to book can be a simple process of running reports at month-end when an account's reconciliation activity is kept up-to-date.
  • Variance Offset Items and Self-Reconciled Items must be extracted from ReconNET and posted to the GL before beginning the bank to book process.

What else is there?

We didn't cover configuration options, as these are maintained by your administrator.

Distinctions and final notes

Datasync is the process by which finalized Bank to Book data is sent to Certification as part of certifying your balance sheet accounts (SOX compliance in the US). It's a simple review process, only requiring a couple signatures. If you don't have Certification and require a validated bank reconciliation, ReconNET has a built-in review process.

Other Notes:

  • All entries made to the GL for items such as ACH sweeps, NSF items, fees, etc. must also be posted into ReconNET. These items may need to be self-reconciled or have a matching POS item manually entered into ReconNET. 
  • POS items can be unloaded from the system. Bank items should never be unloaded. Always key an offsetting entry for them.
  • Minor accounts (cash general ledger) must be tied to the bank accounts.
  • If items never clear, they become an expense.