Bank Reconciliation in Sage One 1

Transcription

1 Bank Reconciliation in Sage One 1

2 Contents Introduction Introduction... 2 Your evolving role as the Sage One Accountant... 3 What are Bank Feeds?... 3 Cashbook and Accounting how bank reconciliation works in each one... 4 Bank reconciliation in Sage One Cashbook... 4 To check your client s bank account... 5 Sage One Accounting Bank Reconciliation Manual Reconciliation...11 What if a transaction doesn t appear as expected? What if the difference isn t zero? Importing a Bank Statement...17 To download your bank statement To import the bank statement To process the imported data...22 Bank feeds...23 Bank reconciliation is arguably the most important financial control in any business. It ensures that money which leaves a business is fully accounted for, and is typically the strongest type of control as there is an element of third party confirmation. Typically bank reconciliations compare and explain the differences between bank statements and cash books or general ledgers. As you ll appreciate, historically bank reconciliation tends to be a difficult process for a small business for a variety of reasons: They are often laborious, with a lot of data to process Bank statements tend not to be open item and roll forward balances Bank statements do not include much information about the transactions Bulk amounts in statements making up many individual items in a company s records Bulk amounts in general ledgers that comprise lots of individual items in the bank Timing differences can be quite significant Bank charges/fees added to individual transactions making the amount differ Exchange rates may vary between the internal accounting systems and the bank rate Service and security...25 Before setting up bank feeds...26 To set up bank feeds...28 To process downloaded transactions...29 To download new transactions Frequently asked questions

3 Your evolving role as the Sage One Accountant Cashbook and Accounting how bank reconciliation works in each one In today s ever evolving market, the successful accountant is starting to understand that his clients consider compliance as a given, and is therefore becoming more of a business advisor to his clients. Data management and analysis versus data entry. Therefore, your focus moves away from transactional processing, and towards the value-add. In order to achieve this, it s vital to ensure that historically labour-intensive client service processes such as bank reconciliation are made as simple as possible. Your business effort starts to focus less on the traditional bookkeeping services, and moves towards a more consultative approach, as the diagram below illustrates. There are different ways to handle bank reconciliation in Sage One: Manually, by printing out a bank statement and then checking off transactions one by one By importing a bank statement into Sage One Using live bank feeds This guide will take you through each of these options, assuming in the main that Sage One Accounting is the service being used. This section will focus first on the key differences in Sage One Cashbook. NB: Bank feeds functionality is available as at no extra charge for any of your Sage One clients using a paid service you also have access to 50 free of charge Sage One Cashbook services. These do not include bank feeds functionality, but it can be added easily for 1 per month per client (for unlimited bank feeds per client). What are Bank Feeds? Bank reconciliation in Sage One Cashbook One of the greatest innovations in accounting, bank feeds can heavily reduce the amount of data entry in a business. The impact of bank feeds for small businesses is enormous. Accounting programs can automatically match a transaction in a bank feed with a sales invoice awaiting collection or a purchase invoice awaiting payment. This cuts out hours of manual data entry required to reconcile accounts. They are a fast, simple way for your clients to reconcile their bank account on a much more regular basis. In Sage One Cashbook, bank reconciliation functionality is referred to as Check Bank. You or your client can use the check bank process to compare and match figures against bank statements. When you check a transaction, the transaction is hidden from the bank activity. This makes it easier for you to identify any possible differences, such as bank charges or interest that you haven t yet entered into Sage One. In Sage One, we use indirect bank feeds via a third party aggregator, Yodlee. Whilst this guide details all of the possible methods to reconcile the bank in Sage One, we recommend Sage One Bank Feeds as the most efficient and time saving method. However, which method you choose is completely up to you and your clients. 3 4

4 To check your client s bank account 1. First, ensure that you log into Sage One Cashbook with your accountant permissions by selecting Login to Cashbook (not Login as Client) 2. Banking > click the bank account you want to check > select Reconcile. 3. Enter the following information: Enter the statement end date* Enter the statement end balance* Enter the statement reference *These details are compulsory. 4. Next > complete the Reconcile window as follows: To reconcile a transaction, select the Reconcile check box. Enter the end date of the actual bank statement you re about to reconcile. Enter the ending balance from the bank statement. Enter a reference for this reconciliation, for example, you could use the statement page number or date. To unreconcile a transaction matched in error, clear the reconcile check box. To record bank interest or charges, click the Interest/Charges link > complete the relevant information > Save. Once you ve matched all of the transactions on your bank account to your bank statement, the difference should be If the difference is not 0.00, check the following: Matched transactions Check the transactions matched have the same dates and value as those on your bank statement and you haven t included extra transactions or missed any. Statement date Check the date is correct as only transactions entered up to the statement date appear here. If the date is incorrect, click back > amend the date > Next > check that the missing transactions now appear. If the transactions still don t appear, it may be because they haven t been entered yet. You should enter all transactions up to the end of your bank statement then start the reconciliation again. Statement end balance Check that you entered the correct balance and it s the same as that on your bank statement. If it s incorrect, click Back > enter the correct balance > Next. Bank interest or charges Check you ve entered these correctly. If you ve made a mistake, you can delete bank charges and interest charged from Expenses > Other Expenses. You can delete interest earned from Sales > Other Income. Previous balance This should agree with the opening balance on the bank statement. If it doesn t, it could be because you previously reconciled a transaction then amended or deleted it or a transaction has already been reconciled. To check which transactions have previously been reconciled: Banking > click the bank account > enter the dates of your last bank statement. Check the transactions with a tick in the Reconciled column match those on your statement. The deleted or amended transaction may not necessarily be from the previous period therefore you might need to repeat this for earlier periods. 5 6

5 If you can t reconcile the difference to 0.00 now, you can return to this window at a later date. You shouldn t continue as once a transaction has been reconciled, it can t be unreconciled. 5. Next > check the information is correct > Save. You ve successfully reconciled your client s bank account and the reconciled transactions won t appear on future reconciliations. If you log in as your client, then you ll get a slightly different experience, as you can see below. To simply check the bank, follow these steps once you ve navigated to the correct bank account: 1. Amend the start and end dates to match the bank statement. The list of transactions updates and only transactions between the two dates appear. 2. Check your client s bank account as follows: If you ve previously checked some transactions on this bank statement, select the Display Previously Checked check box. If you ve imported transactions using import statement, the transactions are automatically marked as checked. To match a transaction to the bank statement, click the relevant transaction or select the Checked check box. To clear a transaction matched in error, click the transaction again or clear the Checked check box. 3. Check that you ve matched all the relevant transactions > Save. You ve now checked the transactions against your client s bank statement. If your client uses an online banking service, it s also possible to import your client s transactions into Sage One using either the Import Statement option, or bank feeds. Both processes are explained in full further on in this guide. To save time, imported transactions are automatically marked as checked when viewing the bank account. 7 8

6 Sage One Accounting The remainder of this guide assumes that you are reconciling the bank for a client using Sage One Accounting. Bank Reconciliation Bank reconciliation gives you the peace of mind that all your client s transactions have been accounted for and that the accounts are correct and up to date. By reconciling your client s bank regularly (or by encouraging your client to undertake this activity), you ll find it easier to identify any discrepancies such as unauthorised transactions. It s easy to see why most businesses will make sure they regularly reconcile their bank accounts. 9 10

7 Manual Reconciliation You can use the bank reconcile option to match the bank transactions entered in Sage One Accounting with those on your client s bank statement. Reconciling these values means the bank balances and transactions in Sage One Accounting are accurate. It s best to encourage your client to reconcile the bank account at least as often as they receive a bank statement normally monthly. Before reconciling you should make sure that all transactions up to the end of the most recent bank statement have been entered. * These details are compulsory. 4. Check the bank account is correct > Apply. If you previously started a bank reconciliation and saved it for later, the saved reconciliation appears. If you want to undo this reconciliation, amend the statement date and end balance as required and apply the changes > Interest and Charges drop-down menu > choose Unreconcile All Entries > OK. 1. Banking > click relevant bank account link. 2. Connect to Bank drop-down > Reconcile. 5. Complete the bank reconciliation as follows: 3. Enter the following information: Statement Date * Statement End Balance * Reference Enter the end date of the actual bank statement you re about to reconcile. Enter the ending balance from the bank statement. Enter a reference for this reconciliation, for example, you could use the statement page number or date. To reconcile all transactions at once > Interest and Charges drop-down menu > Reconcile All Entries. To reconcile transactions one at a time > for each transaction select the check box in the Reconciled? column. To unreconcile a single transaction matched in error > clear the check box in the Reconciled? column. To unreconcile all transactions at once if matched in error > Interest and Charges drop-down menu > Unreconcile All Entries. To record bank interest or charges > Interest and Charges > complete the relevant information > Save. As you reconcile the transactions the reconciled balance adjusts. Once you ve reconciled all of the transactions in the list, the reconciled balance should match the target balance and the difference should be zero. The starting balance is your last reconciled balance

8 6. Click Finish. The reconciliation is not reversible. If required, you can save the reconciliation and return to it later, for example if you can t reconcile the difference to zero now. To save the reconciliation, from the Finish drop-down menu, choose Save for later. 7. To print details of the reconciliation, click Print. Depending on your Internet browser, the report opens in a new window or tab. You can print the report from your browser menu bar then close the new window or tab. You ve successfully reconciled your client s bank account. When you view the bank activity a tick appears against the transactions in the reconciled column. You can view details of this and previous reconciliations from the Banking tab > click the required bank account > Reconciliations. The bank activity shows all your client s bank transactions. If a transaction has previously been reconciled, a tick appears in the Reconciled? column

9 What if a transaction doesn t appear as expected? What if the difference isn t zero? The Bank Reconciliation option only shows transactions that are currently unreconciled and are dated on or before the statement end date for the specified bank. If a transaction doesn t appear: Check you ve entered the correct statement date. Only transactions up to and including this date are available to reconcile. If the date is incorrect, enter the correct date > Apply > check the transaction appears. Check if the transaction has already been reconciled. To do this, save the reconciliation you ve done so far by choosing Save for Later from the Finish dropdown menu. Activity > Refine > check the from and to date covers the date of the transaction and that transaction appears. If it does appear and there s a tick in the Reconciled? column, the transaction has already been reconciled. If you can t reconcile the difference to zero: Check the Statement End Balance is correct. If it isn t, enter the correct amount > Apply > check the difference is now zero. Ensure the correct transactions have been reconciled and none have been missed. If you ve reconciled a transaction in error > clear the Reconciled? check box. Check the value of your reconciled transactions. If a transaction has been entered with the incorrect value > clear the Reconciled? check box. You can then save the reconciliation that you ve done so far and return to the bank activity. From here you can click the relevant transaction and amend the value. If the transaction doesn t appear on the bank activity, check the from and to date are correct. It may be possible the transaction was entered with a date outside the range. To make sure it hasn t been entered with an incorrect date, try entering a from date in the past to a date in the future, for example, 01/01/2000 to 31/12/2020. If the transaction has been entered with an incorrect date, save the reconciliation you ve done so far by choosing Save for Later from the Finish drop-down menu. Activity > click the relevant transaction > amend the date > Save. If the transaction still doesn t appear, check the activity of your other bank accounts to make sure it hasn t been entered against a different account. If it has, delete the transaction then re-enter it using the correct account. If the transaction isn t showing against any of your other accounts, it s likely it hasn t yet been entered into Sage One. You should enter all of your transactions up to your statement end date before reconciling your bank account

10 Importing a Bank Statement To download your bank statement As you ve seen in the previous section, manual bank reconciliation usually involves going through each transaction on the bank statement and matching it against the information in the accounts. Depending on the number of transactions, this can be quite time consuming and it s easy to make mistakes. Completing a bank reconciliation in Sage One is much easier using the bank statement import option. This feature is available to all Sage One customers, and is compatible with banks that produce bank statements in a QIF or OFX file format. We suggest advising your client to contact their banking provider to see if this option is available to their business. Import a bank statement and Sage One will automatically match the transactions on this statement with the accounts. This will make your business more efficient by saving time and reducing human error. To import bank statements, you need to advise your client to first download them from their online banking service as QIF or OFX files. NB: When the file is downloaded, depending on the Internet browser your client uses, it may automatically download to their Downloads folder, or alternatively they ll be prompted to save the file. If you choose to save the file on behalf of your client, or are recommending this, we recommend saving it to your C drive rather than your desktop as this can affect the file type. You should also make a note of the statement end balance, as you need to enter this to help you reconcile your statement to your Sage One entries. If your client needs help downloading your file, please advise them to contact their online banking service provider. To import bank statements into Sage One Accounting, you must log in as the owner. The owner is the person who first signed up to Accounting, or you as the linked Sage One Accountant (you automatically have owner rights for all of your linked Sage One clients). This feature is a smart bank reconciliation tool. For example, if you have a transaction appearing on the bank statement but not in Sage One Accounting, you will be given the option to create a bank payment or receipt based on that transaction. The intuitive software will both speed up bank reconciliation and quickly help to resolve any discrepancies. You are also able to easily reconcile your foreign currency transactions in Sage One Accounting. A foreign currency transaction will always show up in your client s bank account in Sage One in Pounds Sterling. Use live exchange rates so the transaction in your client s accounts will exactly match the statement, saving you from calculating the conversion rate yourself. If your client has linked their bank account to a bank feed, the Import Statement option doesn t appear. You must unlink the bank account to turn off bank feeds before you can use the Import Statement option

11 To import the bank statement 1. Banking > click relevant bank account link. 2. Connect to Bank drop-down > Import Statement. 4. Enter the following information: Enter the statement end balance* Enter the statement reference 5. Click Upload. Enter the ending balance from the bank statement. Enter a reference for this reconciliation, for example, the statement date. Your transactions are imported and each item appears on a different line, ready to process. To discard a bank statement imported in error, you must discard each entry > Complete > Finish. 3. Depending on your Internet browser, click Browse or Choose File > browse to the location in which you saved your bank statement file > click the file > Open

12 To process the imported data For each transaction, you can choose to: Match Sage One automatically matches existing payments or receipts recorded on the same day for the same value. If the match found is correct > Match. If the match isn t correct > to remove the match, choose Create, Transfer or Discard as appropriate. If Sage One can t match the transaction > Find Match. Sage One checks the amount and date against existing transactions and lists any that match. Select the check box for the relevant transaction > Confirm match. Create Use this option to create the transaction in Sage One. Enter the following details, then click Create: Create transaction for If applicable, enter the contact s name, as you type a list of your contacts appears > choose the relevant contact. Account Choose the ledger account you want to record this payment or receipt against. Reference This is the same as the reference on your statement, however you can change this. VAT rate Choose the relevant VAT rate. This option only appears if you re registered for VAT. Transfer Use this option to transfer the value from or to the selected bank account. Enter the following details, then click Transfer: Transfer From or Transfer To Choose the relevant bank account. Reference This is the same as the reference on your statements, however you can change this. Discard If you ve already entered the transaction and you don t want to import it > click the discard button > Yes. Once the transactions are imported into Sage One, to save time they re automatically marked as cleared in the bank

13 Bank feeds In order to save even more time, you can choose the third reconciliation option Sage One Bank Feeds. Bank feeds are a quick and easy way to record transactions and reconcile the bank all in one go. After your client links their bank to Sage One, any and all banking transactions will automatically be imported into Sage One Accounting. You will only have to assign customer/supplier accounts, nominal codes and VAT codes and you re good to go. The more transactions you import, the easier it becomes to use. The software will begin to recognise similar transactions and will pre-empt and prepopulate those details, so bookkeeping will become a validation rather than a data entry process. In simple terms, a bank feed provides you with a quick link between your client s bank account and your accounting software. Third party software scans through the online bank account and looks for any applicable bank transactions, typically from the last 90 days. Online Bank Account Bank feeds Cloud Accounting Software Time Saving By using bank data as the primary data source, much less time is spent entering data. As you or your clients use bank feeds, the system learns how the transactions will look in Sage One. Seasoned users will spend up to 80% less time actually entering their data. Bookkeeping becomes a validation process rather than a manual data entry process. Simplicity Sage One bank feeds offer a market leading bank feeds experience. We can say this with confidence as it is actually our fourth iteration of our bank feeds experience worldwide. Extensive user feedback has taught us what users find confusing about our current iterations and this feedback has been at the forefront of the new designs. Real time Bank Feeds update every 24 hours meaning you can see real bank balances as compared to Sage One bank balances as well as all new transactions every single day. They can also be regularly refreshed throughout the day. Reduce errors By using bank data as the master data source in Sage One, you are effectively bank reconciling every time you use them minimising any surprises you may encounter at month end. Watch this introductory video about bank feeds in Sage One. Using bank feeds to reconcile your clients business bank accountant offers more key benefits, other than the obvious one time saving: 23 24

14 Service and security Before setting up bank feeds Bank feeds is an optional service and is provided by Yodlee, a third party online banking solution provider. Yodlee connects to your client s online bank account and retrieves statement and account transaction information for you to use with Sage One. Sage One doesn t store your client s online banking credentials; these are stored by Yodlee. Yodlee are certified as a Payment Cards Industry (PCI) Level 1 Service Provider and have EU Privacy Safe Harbor certification. For more information about data security, please visit If your client s online banking service uses multi-factor authentication security, they must enter their security key or passcode when they set up bank feeds and before downloading transactions. You can link a bank feed to current, savings and credit card bank account types in Sage One. You can t link to a Loan, Cash in hand or Other account type. You can download transactions from the last 90 days. If you need transactions that are more than 90 days old, you can import your bank statement, or enter the transactions manually before continuing. If you re in the middle of importing a bank statement, you should complete this first to avoid duplicating transactions. If you re part way through reconciling your bank account you should complete this. It s important to consider the date you want to start using bank feeds and import transactions from. Ideally you should choose the day after the date you last reconciled your bank up to. If you enter a date before this, the transactions are included in the import but you can discard them. We recommend your client confirms with their online banking provider if using bank feeds compromises the terms and conditions of their service

15 To set up bank feeds NB: For security purposes, your client should always complete this stage of the process. 1. Banking > click Connect to Bank. 2. Read the terms and conditions > select I accept the Terms and Conditions check box. 3. Click Continue. 4. Enter the name of your bank > Search. 5. Select your bank > enter your online banking credentials. These are the same details your client uses to log in to their online banking website. If their online banking service uses multi-factor authentication security, they will be requested to enter further security details. 6. Click Add. Sage One verifies your credentials and lists your online bank accounts. 7. Close > select the account you want to link to > Continue. 8. Enter the date you want to import transactions from > Finish. Your clients transactions are downloaded and each item appears on a different line, ready to process

16 To process downloaded transactions The process is now exactly the same as for Bank Statement Import. For each downloaded transaction, you can choose to Match, Create, Transfer or Discard. Every evening from this point on, Sage One will automatically import these transactions into Sage One. Sage One will initially attempt to match each transaction with transactions that already exist in Sage One. If a match is found, Sage One will highlight the match and you can confirm. If Sage One can t find a match, or you don t agree with the auto-match that s been performed, you can either search for a matching transaction yourself, or create a new transaction. This couldn t be simpler - simply select the contact the transaction represents, the correct VAT details and the nominal code the transaction should be posted to. The next time Sage One encounters a statement line item with that description, Sage One will automatically populate the contact, VAT and nominal details for you. The system learns about your client s transactions the more you use it. If your client has similar transactions every month the potential time savings are enormous! Once you ve imported the transactions into Sage One, to save time they re automatically marked as cleared in the bank. So, in summary, Sage One Bank Feeds works like this: Your client logs in, accesses the Banking area of their Sage One service, selects the Bank account they want to link to, and selects Download Transactions from the drop down list on the right. Your client then accepts the terms & conditions, and follows the instructions to Connect - providing details of who they bank with, the type of account they want to link and ultimately entering their online banking credentials. Once this is complete, your client will be taken to the transaction import screen at this point you can log in on their behalf, and import up to 90 days (this varies by bank) of transactions automatically in Sage One

17 To download new transactions 1. Banking > click new transactions for the required bank account. If your client s online banking service uses multi-factor authentication security, they will be requested to enter their security details they must perform this action before you can continue processing transactions on their behalf. Transactions that appear on your client s bank statement since you last imported then appear. You can match, create transfer or discard as appropriate. For more information, please see the previous section. To refresh bank feeds Bank feeds can be manually refreshed, once every 15 minutes if necessary. 1. Banking > click the refresh button for the relevant bank account. If your client s online banking service uses multi-factor authentication security, they must enter their security details before the bank feed refreshes each time. The bank feeds refreshes and any new transactions are downloaded. For a video walkthrough on bank feeds functionality in Sage One Accounting, click here

18 Frequently asked questions To help you with any bank feeds queries you or your clients may have, we ve put together a list of common questions. Does activating bank feeds compromise the terms and conditions of my online banking service? We recommend that you confirm with your online banking service provider whether using a bank feed compromises the terms and conditions of use.a Where are my online banking log in details stored? Your online banking service credentials are held by Yodlee, a third party company. Your details are not stored in your Sage One service, or by Sage. Yodlee are certified as a Payment Cards Industry (PCI) Level 1 Service Provider and have EU Privacy Safe Harbor certification. For more information about data security, please visit What is multi-factor authentication? This is an extra level of security many banks require when you log in to your online banking service. You re requested to enter further security details, for example a security code, pin number or passcode, when using bank feeds and downloading transactions. Can I set up a bank feed for more than one bank account? Yes, you can set up a bank feed for as many accounts as you wish. Why should I allow cookies? Some websites or web pages do not work as expected unless you accept cookies. For example, you may not be able to log in to a website, even though you re using your correct details. To avoid problems linking to your online banking service, you should check if your PC, laptop or ipad settings allow cookies from other websites, including Sage One. For more information on how to allow cookies, please visit the relevant website depending on your Internet browser: Safari, Chrome, Mozilla Firefox, Internet Explorer. If you use any other Internet browser, please refer to your browser help system. How do I turn off bank feeds? If you decide you no longer want to use bank feeds, you must unlink your bank from Sage One. 1. Banking > Manage account drop-down > Disconnect bank account. 2. To confirm > click Disconnect. How do I turn my bank feeds back on if I ve turned it off? If you disconnect a bank account, you need to set up the bank feed again. You should follow the steps to set up bank feeds. If you re-connect a bank feed to a previously connected bank, you can choose this from the Existing bank dropdown list, or select a different bank. What should I do if I open a new bank account? If you move to a different bank and open a new bank account, you must turn off the bank feed for your old account and set up a new one. You must also be set up for online banking with your new bank and know your online banking credentials. Follow the steps on how to turn off bank feeds and set up a bank feed again for your new bank account. Can I control another user s access to bank feeds? If you re the owner of the Sage One Accounting service you can restrict access to the bank within User Settings for the selected user. How can I check if my feed is working? You can check from our bank feed status page. We update this daily to confirm the status of bank feeds from different providers. We recommend that you bookmark this page. How do I fix common bank feed errors? To help you to resolve common bank feed errors, you can check common error codes for further information and troubleshooting tips. Disconnecting your bank doesn t remove any transactions from the Sage One bank account

19 Should you require any further assistance, please call Sage One Customer Services on Sage (UK) Limited North Park Newcastle upon Tyne NE13 9AA Sage (UK) Limited 2015 registered in England No /