A Bank reconciliation is a process that explains the difference between the bank balance shown in the bank statement as supplied by the bank, and the corresponding amount shown in the organization’s own accounting records at a particular time.
Differences may occur just because of some unknown charges by bank or any transaction or anything made by company.
It may be necessary to go through and match every single transaction in both sets of records since the last reconciliation, and see what transactions remain unmatched. The necessary adjustments should then be made in the cash book, or any timing differences recorded to assist with future reconciliations.
For this reason, and to minimize the amount of work involved, it is good practice to carry out such reconciliations at reasonably frequent intervals.
We will check one of the way that will show how Bank Reconciliation works in OpenERP.
First of all, we will start by creating invoices.
In below screen, we can see that there are two OPEN invoices.
Now open Bank Statement from the menu Accounting > Bank & Cash > Bank Statement. We will find the screen as shown here.
As per following screen in Transaction tab, Statement Lines contains one line having partner is the one of our OPEN invoice partner.
Here two options are there, that we can insert statement lines from csv file “if provided by bank” or we can do manual entry.
Please note that we have created Statement line amount is less amount (which is 450.00) than the Invoice amount (which is 900.00) to better understand the reconciliation process.
There is a field called Ending balance which contain the total amount which we got from bank statement. We can enter in advance if we have that amount.
Once we confirm the Bank Statement, we will have Journal Entries of the entered amount.
Now to process the reconciliation, we will select Manual Reconciliation from the menu Accounting > Periodical Processing > Reconciliation.
List of statements which should have reconciliation have to be done will be displayed here. Just select all related entries and execute a wizard called “Reconcile Entries” from the right side panel in the “Action”.
Following screen will be displayed with the amount to be credit, debit and write-off.
We have two options here are: Reconcile with Write-Off and Partial Reconcile.
If we go for partial reconcile option then we have to wait for the remaining bank statements to be reconciled later.
Another option is Reconcile with Write-Off as shown in below screen.
We have to select Proper Journal and Account here.
Just press Reconcile button and we will get our entries reconciled and will be removed from Manual Reconciliation list.
Now we can check the unposted entry in our Journal Entries and can process accordingly.
Here we have done with the Bank Reconciliation.