Bank Record Creation – Bank Management

•      Bank Management by Account - Allows you to locate and view the records in the Bank file using several different display sequences.  The program is also used to clear bank records and to manually create bank records when required. 

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•      Insert Voided Check – The Insert Voided check option is used to create a bank record for a damaged or voided check that has not been issued or processed by the system (such as a check form that was damaged or voided prior to printing).  The option  allows to create a bank record for the document without posting any activity to the general ledger.

Journal Entries - As journal entries are posted to the general ledger cash accounts, to record interest income and expense, bank charges, etc, the system allows the user to create bank records to record the transactions in the Bank file (not yet implemented).

Clearing Bank records - On a regular basis, the payment, deposit and other records in the bank file should be "cleared".  Clearing a bank record involves recording the date on which the transaction was processed by your bank and it also involves verifying the amount at which the transaction was processed by the bank.  The method to be used when clearing a bank record depends on the currency in the bank record.  The following sections briefly describe how both local and foreign currency bank records are cleared.

Clearing Local Currency Bank records -Local currency bank records can be cleared using the Bank Management by Account program.  In this program, the operator merely tags or selects one or more un-cleared records and presses a key to clear them (the operator may only tag multiple records if they are all in local currency).  Once the operator presses the clear key, the system prompts them for the cleared date to be used for the selected records, and it then updates these records with the date specified by the user.  The amounts for a bank record created in local currency may not be modified by the user in the clearing program.  If the operator determines that a local currency check or deposit was processed by the bank at a different amount than that recorded on the system, additional action may be required.  This may include voiding and reissuing the check (in the case of a payment), voiding an Accounts receivable check (in the case of a deposit), or possibly making a journal entry to book the difference.  Since a local currency bank record should never have any foreign currency gain or loss associated with it, a difference between the amount recorded on the system and the amount recorded on the bank statement must be researched and corrected.  This may require voiding, reissuing or modifying the original transaction on the system based on the situation.

Clearing Foreign Currency Bank records - Foreign currency bank records are also cleared using the Bank Management by Account program.  To clear a foreign currency record, the operator first selects the appropriate record and then presses the clear key.  At this point, the operator may specify the cleared date for the transaction and they may also specify the amount at which the transaction was cleared by the bank if it is different from the amount recorded on the system.  If the operator does modify the cleared amount that is recorded in the bank record, the system will make a journal entry for the amount of the change (the difference between the cleared hc amt recorded on the system and the amount entered by the operator).  The journal entry is made to the appropriate cash account and to the Foreign Currency Gain or Loss Account.

Voiding bank records - Bank records can be voided only by using one of the two methods described below.  Note:  The system will warn the user when they try to void a transaction that has already been cleared but it will allow the user to continue and it will make the appropriate journal entries regardless of whether the record has been cleared or not.

Accounts Payable checks or wire transfers can be voided using the Void an AP Check program.  If an accounts payable check or wire transfer is voided, the system reopens the invoices and amounts paid with the check or wire in the current accounting period.  The system also reverses any journal entry activity resulting from clearing the check (i.e. any foreign currency adjustments).  The amounts in the bank record are cleared and the status of the record is set to "V" to indicate that it has been voided.

Accounts receivable payment transactions can be voided using the A/R Check Inquiry program.  This program allows the user to void a specific customer payment and it reopens any invoices that were closed with the payment.  If an A/R check record is voided prior to it being deposited, there is no effect on the bank system (it was never included in a deposit and therefore never affected the bank system).  If a check record is voided after it has been deposited, the system creates a new bank record to show the change to the original deposit record and this new record references the original deposit number.  This method is used as there is no way to void an entire accounts receivable deposit.

Reconciling bank activity to the general ledger - On a regular basis, reports should be run to verify that all Bank records are substantiated with the proper journal entry detail and vice versa.  This is especially important since the bank system is date oriented and the general ledger is period and year oriented. 

Bank Transaction register - used to print a report of both outstanding and cleared checks.  Also audits the journal entries associated with each bank record to make sure that all amounts have been properly recorded in the general ledger.

Reconciling bank activity to the bank statement

Outstanding check list. - prints both fc and cleared hc amounts

General ledger postings report - once GL tied to bank transactions can use the balance forward plus adj for os checks, deposits to tie to bank.

Later we automate this - need to store reconciled balance fwd from last stmt.

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Bank Management Operations Programs