My accountant says that I need to ensure that what amounts are showing in bank spend in manager match what is showing on actual bank account.
For example, I could pay two invoices to the same company - in the past I made one payment on my bank account, but I would have done spend money for each invoice in Manager thus resulting in two payments. Same concept with depositing multiple cheques from different customers. I would result in one amount on my bank statement, but several transactions in bank receive.
Following the guides, I have worked out that I need to go to bank spend money and select accounts payable (or bank receive - accounts receivables) and I can select the relevant invoices.
This is straightforward when I am in control of the bank spend or receive - either I do a bank transfer or I deposit cheques on the day I do the transaction in manager.
However, I am not sure how bank reconcilation works in the sense of exactly what do I want to reconcile. I will give you two transactions for example!
My broadband bill might come off on the 5-8th of the month. Normally what I did in the past is that I saw that the broadband bill had come off, so I would create the invoice and do bank spend.
Another type of transaction would be something like me buying stuff online today, so I would create the purchase invoice, but the money would only come off the account a couple of days later.
A third transaction might be one showing on the bank statement, but for which I have not yet received the invoice!
Does bank reconciliation just match amounts in Manager with the bank statement or would it change the dates to whatever date is showing on the bank statement. How does this affect say the broadband invoice in the sense would it matter if the money comes out of the account (in Manager) before the date of the invoice in Manager?
I have never used the bank reconciliation partially because I don’t know how it works in Manager, partially because I don’t know whether I should be reconciling dates of the transactions or just reconciling the transactions as in to whom, from who and amount type detail. Also I never knew that I could pay several invoices in one bank transaction in Manager!
I have read the guide for bank recon, but I thought that I would ask her as I don’t want to make mistakes with doing this.