Frequently Asked Question

1 Reconciliation Overview
Last Updated 5 months ago

Bank Reconciliation

By Reconciliation we normally mean the process whereby one or more financial ledger transactions are matched against one or more banking transactions.

Banking Transactions are the banking movements that have been downloaded from the bank and imported into PropPack. PropPack maintains an electronic copy of all banking transactions (analogous to Bank Statements).

The aim of Reconciliation is to prove that the ledger entries are correct.

Typically a single banking entry matches a single ledger entry but frequently a group of ledger entries may match a single banking entry. An example would be when a group of expenses due to a single supplier are paid together.

PropPack allows reconciliation of any permutation of entries within the three PropPack ledgers (Rent, Expense, Invoice) and the banking transactions.

The primary vehicle used in the reconciliation is the Payment Reference on the ledger entry and the Banking Reference on the banking entry.

When issuing cheques, the payment ref would be the cheque number and that cheque number would subsequently appear as the banking ref on the banking transaction.

Similarly when paying into the bank cheques received, the paying-in-slip number would act as the payment and banking refs.

With on-line banking transactions the banking refs could be virtually anything. So for the purpose of reconciliation we use just the first 10 characters of the banking ref and thus limit a payment ref also to 10 characters.

Reconciliation is achieved by grouping existing non-reconciled ledger entries by their payment refs and and arriving at a total value. We then do the same with the first 10 characters of non-reconciled banking transactions and accumulate the total value for each such unique banking ref.

We then compare the two totals, matching payment refs with banking refs and comparing their total values.

Where the bank and ledger totals match we have achieved a reconciliation. PropPack updates all the relevant ledger and banking transactions with a unique serial number so all the associated records are locked together into a single reconciliation. This reconciliation serial number is referred to in PropPack at the Reconciliation ID or RecID for short.

Wherever the RecID is displayed, the user can double-click on it to view the details of all the transaction that are part of that reconciliation. As a minimum there will always be one banking entry and one ledger entry. There is no maximum to the numbers of transactions involved in a single RecID.

Manual Reconciliation

There is another type of reconciliation which we call a Manual Rec. The word Manual here is in contrast to Bank.

In this case we are reconciling together two or more ledger transactions (any mix of Rent, Expense and Invoice transactions) where the total of all the transactions are zero. In accounting language this would be referred to as a Journal.

A simple case of a Manual Rec would involve two transaction, such as an Expense and a subsequent Credit Note.

Let us look at these two examples in a little more details.

You receive an Expense invoice and enter it into the ledger. Some time later you receive a Credit Note to reverse the original Expense. Their total is zero, as they should be, but as things stand they will never reconcile to a bank transaction.

They will keep on appearing on error reports as 'unreconciled' transactions. To stop this happening you need to do a Manual Reconciliation on them so that they are no longer 'unreconciled'.

A Manual Rec group is also given a common serial number like a Bank RecID. To differentiate between the two, the series of numbers used for Manaul Recs are negative (-1, -2, -3 ... as apposed to the regular RecID series of 1, 2, 3 ...).

Do a search for the word 'recon' to view the various FAQs describing the difference types of reconciliations in more detail

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