Lesson 8.2: Performing Bank Reconciliation
Bank reconciliation is one of the most critical internal control procedures for any organization. It ensures that the cash balance shown in your General Ledger agrees with the bank’s records. FastFund Online provides a streamlined tool to reconcile all cash accounts, record missing bank fees or interest, and lock down cleared transactions to prevent accidental editing.
This lesson covers how to initiate a reconciliation, clear transactions, record bank adjustments, and finalize the process to generate audit-ready reports.
The Reconciliation Process
FastFund uses the standard accounting formula for reconciliation: Bank Statement Balance – Outstanding Checks + Deposits in Transit = General Ledger Cash Balance
To begin, you must have your physical or digital bank statement ready.
1. Navigate: Go to Transactions > Activities > Bank Reconciliation.
2. Select Account: Choose the cash account you wish to reconcile from the drop-down menu. Note: Only accounts designated as “Bank” type in the Chart of Accounts will appear here.
3. Statement Date: Enter the Reconcile as of date (usually the statement ending date).
4. Ending Balance: Enter the Bank Ending Balance from your bank statement.
◦ Note: The Bank Beginning Balance is automatically populated from the previous month’s reconciliation. If this is your very first reconciliation in FastFund, this figure comes from the account’s beginning balance.
[INSERT SCREENSHOT: The Bank Reconciliation header showing the Bank Account selection, Reconcile Date, and Bank Ending Balance fields]
Clearing Transactions
The reconciliation window is divided into two sections:
• Deposits and Other Credits: (Left side) Displays all deposits and incoming funds.
• Checks and Payments: (Right side) Displays all checks, withdrawals, and outgoing funds.
To Reconcile: Compare the list in FastFund against your bank statement.
1. Mark Cleared Items: Click the checkbox next to every transaction that appears on your bank statement.
2. Watch the Totals: As you check items, the “Cleared” total updates, and the “Difference” calculation in the bottom right changes.
3. Outstanding Items: Any transaction in FastFund that does not appear on the bank statement (e.g., a check mailed yesterday) should be left unchecked. These are your outstanding items.
Recording Bank Adjustments
Often, your bank statement will include transactions you haven’t recorded yet, such as monthly service fees, wire transfer fees, or interest income. You do not need to leave the reconciliation screen to enter these.
1. Click the ADD ADJUSTMENT button.
2. Type: Select whether this is a Deposit (addition to cash, like interest) or a Check/Payment (deduction from cash, like service charges).
3. Details: Enter the Date, Amount, and the General Ledger offset account (e.g., “Bank Service Charges” expense).
4. Click OK. This automatically creates a Journal Entry for the adjustment and marks it as cleared in the reconciliation.
Handling First-Time Reconciliations
If you are reconciling an account for the first time in FastFund, you may have “pre-existing” outstanding checks or deposits that were written before your FastFund start date. These won’t appear in the standard list because they weren’t entered as transactions in the current system.
• Click the Outstanding Items button to manually enter these prior-period outstanding items so they can be cleared. Once the first reconciliation is finalized, this button is no longer available.
Finalizing the Reconciliation
The goal is to get the Difference field (displayed in the bottom right) to 0.00.
• If the Difference is NOT Zero: You have likely missed a transaction, marked a transaction in error, or entered the wrong Ending Balance. Review your work.
• If the Difference is Zero:
1. Click Save if you want to come back later.
2. Click Finalize to complete the process.
3. Reviewer Options: If your internal controls require it, you can select who prepared the reconciliation and who reviewed it.
Once finalized, FastFund generates a Bank Reconciliation Report and locks the cleared transactions. A cleared transaction cannot be edited or deleted unless the reconciliation is reverted.
Reverting a Reconciliation
If you discover a material error after finalizing, FastFund allows you to Revert the most recent reconciliation.
1. Select the Bank Account.
2. Click the REVERT button.
3. This re-opens the most recent period, allowing you to uncheck items or add missing transactions. You must revert months sequentially (e.g., you cannot revert January without first reverting March and February).