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GL Reconciliation
Shop Trac has a GL reconciliation feature
that although time consuming to setup can be a real time
saver when used properly.
Typically GL accounts that are reconciled are those
that need to agree with other records. The best example
is your bank account, and we will use this as an example
in this bulletin. The same procedure however also applies
to any other GL account you wish to reconcile.
Before an account can be setup as reconcilable you
will need to complete a manual reconciliation for that
account. In our example, using your last bank statement,
you would compare the closing amount of this statement to
the current GL balance for your 'Bank' GL account.
Normally these values will not be the same, the
difference being those transactions that have been posted
into Shop Trac but do not yet appear on your
bank statement. You will need to make a list of these
transactions, and complete a reconciliation so that the Last
Bank Statement Balance + Sum of Outstanding Items =
Current GL Bank Balance. Any differences and/or
errors will need to be input as transactions into Shop
Trac, and included in the 'Sum of Outstanding
Items'. The list of these items will be needed to setup
the 'Bank' GL account for reconciliation.
Using the Edit | General | GL Accounts option, change
the "Reconcile" field for the 'Bank' GL account
to a 'Yes'. When you select "Save" from the Edit
Menu, you will have the opportunity to input the
outstanding item list that you created during the manual
reconciliation into the reconciliation journal. This SED
has the following fields in addition to the Edit Menu:
 | Last Reconciled Balance: This field indicates
that last reconciled balance. |
| Keep: This 'Yes/No' type of field is used to
indicate if you wish to retain the current entry.
If set to 'No' then the amounts in this line have
NO effect of the current reconciliation amounts. |
| JN: This field is a 2 letter code to indicate
which journal this entry can be found in. |
| Date: The field contains the date of the
transaction. |
| Document: The document ID of the transaction is
in this field. |
| Description: The field is used for the
transaction description. |
| Amount: The field contains the amount of the
transaction. Credits are negative. |
Once this SED is complete, use the "Done"
option on the Edit Menu to establish this
account as reconcilable. Please note that the "Last
Reconciled Balance" + "All Outstanding
Items" must equal the current GL balance for the
specified account. Once this step is complete, every Shop
Trac transaction that accesses this account will now
create another entry in this journal.
The Transaction | General | Reconcile option is used
to actually reconcile a GL account. After inputting a
valid GL account number, a list of all items that have
NOT yet been reconciled will be displayed. Using your
example of the 'Bank GL Account' this would be compared
to your next bank statement. Items on the statement can
be checked, and the closing balance of the statement
should be input into the "Closing Balance"
field. This SED has the following fields in addition to
the 'GL Account' field:
| Balance Forward: This field which cannot be
changed indicates the current "GL Account
Balance" for the specified account. |
| Total Cleared: This field will change to reflect
the value of the items that have been reconciled. |
| Unresolved: This field indicates the value of the
items that still need to be reconciled before
this account is balanced. |
| End Balance: This field contains the balance that
you are attempting to obtain during the
reconciliation process. In our example this field
would be completed with the closing balance of
the bank statement being reconciled. |
The Edit Menu of this 'Reconcile' SED has the
following options:
| Save: This will save the data as it is displayed,
but will not update any reconciliation
information. This is useful if you need to add
another transaction before you can complete the
reconciliation for this account. |
| Edit: This will return the cursor to the 'GL
Reconciliation' SED. |
| Abort: This will abort any changes made in the
current edit session. |
| Update: This option required that the
"Unresolved" field is zero. This will
update the reconciliation data, and remove those
transactions that have been reconciled. |
| Print: This will print a report based on the
reconciliation information for the currently
selected GL account. |
Reconciliation Tips
Whenever an GL account needs to be reconciled it is
best that the data for the reconciled account matches the
data being used to actually do the reconciliation. In our
example of the 'Bank GL Account' it would be best if the Shop
Trac entries were the same as the entries shown on
the actual bank statement. This works fine for most
statement entries such as accounts payable cheques and
bank service charges, but does not work as well for
accounts receivable payments. You may have a large number
of payments that make up a single deposit, and result in
only a single entry on your bank statement. The solution
to this is to create another reconcilable GL account to
consolidate these entries into a single bank entry. Again
using our example of the 'Bank GL Account' this would
require the following steps:
| Use the Edit | General | GL Account option to
create a new 'Asset' account called "Deposit
Clearing" |
| Indicate that this account is to be reconciled by
setting the "Reconcile" field to 'Yes'.
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| Change the "Accounts Receivable Bank GL
Account" in the Setup | Defaults option to
this new account. |
All accounts receivable payments will now be posted to
this new "Deposit Clearing" account. When a
deposit is made use the Transaction | General | Ledger
option to 'Debit' the "Bank" account" and
'Credit' this new "Deposit Clearing" account.
This would create the single bank account entry, as well
as a clearing entry that will allow us to reconcile the
"Deposit Clearing" account.
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