Reconciliation of Bank accounts

Reconciling the company's bank accounts with the banker's statement is a regular task of accounting. In Tally, Reconciliation of Bank Accounts facilitates the following:

For instance, if you issue a cheque on 8th April and your bank clears it on 19th April, you would set the Bank Date for the voucher as 19th April. This means that when you need to 'check back' later, whether the entry made by you is correct, you will only need to verify the bank statement of the 19th.

This is of crucial importance in Auditing. The Bank Reconciliation is one of the pre-requisites of auditing and verification of the correctness of accounts at the year end. However, it is not a 'real-time' task, meaning auditors do not do it on the first day of the next year.

For e.g., the reconciliation made on 31st March, should be 'viewable' even in August, by when almost all the cheques would have subsequently been marked Reconciled. Tally provides you with a facility of achieving this also.

Bank accounts may have a different Starting Date for reconciliation purposes. When you create a bank account, you are prompted to give an Effective Date for Reconciliation. Normally, this would be the Books Beginning from date itself. However, you could have imported data from a previous version of Tally or from any other system (where the reconciliation process was not available or was different). In that case, you may not want to reconcile the bank account with your bank statements from the very beginning. Give the date from which you want the reconciliation facility to be active. Once you do this, previous entries would not appear for reconciliation, but would be taken as a reconciled Opening Balance.

A quick experiment with Reconciliation will show you what it all means. Here is how you go about it:

(You can choose a bank book from any of the following: Balance Sheet, Trial Balance, Display > Account Books > Cash/Bank Books).

2.	Bring the cursor to the first month (typically April), and press Enter. This brings up the vouchers for the month of April. Since this is a bank account, you can see an additional button F5: Reconcile on the button bar to the right. Press F5.

3.	The display goes to the Reconciliation mode, which can be edited. The primary component of the current screen is the column for Bankers Date.

4.	The Reconciliation found at the bottom of the screen shows:

The Balance as per Company Books reflects the balance as on the last date (in the example, it is 30th April).

The Amounts not reflected in Bank are the debit and credit sums of all those vouchers, whose Bank Date is either BLANK, or LATER than 30-Apr (i.e. these vouchers have not yet been reflected in the bank statement).

The Balance as per Bank is the net effect of the Book Balance offset by the amounts not reflected in the Bank – which must equal the balance in the bank statement

Note: Some discrepancies may persist due to entries made in the bank statement, which you have not yet entered in your books. You would reconcile these manually, and print your reconciliation.

As you mark the individual vouchers by setting the Bank Date, you will notice that the Reconciliation at the bottom of the screen keeps updating the changes. Once this process is complete, press Ctrl + A or Enter as many times as necessary to skip over the unmarked vouchers and accept the screen.

The next time you opt for reconciliation, the screen displays only those vouchers that remain unreconciled. You can also display vouchers that are already marked as reconciled, in case you need to edit the marking, by using F12: Configure

Note: It is not possible to reconcile opening balance and can be done only with available physical transactions.

Set Allow back dated Reconciliation to Yes to enter bank dates which are lesser than the Voucher date.