Performing Book-to-Bank Reconciliation

This chapter provides an overview of book-to-bank reconciliation, lists prerequisite tasks, and discusses how to perform book-to-bank reconciliation.

Understanding Book-to-Bank Reconciliation

This section discusses:

• Prerequisites.

• The book-to-bank reconciliation process.

• A technical overview of book-to-bank reconciliation functionality.

Prerequisites

Before running the Book-to-Bank Reconciliation process, verify that you have correctly configured your general ledger accounts and external bank accounts. Note the following configuration considerations:

• Define your external bank accounts so that there are no duplicate general ledger business unit and general ledger account combinations.

• Do not define the same bank ID and account number multiple times either under the same setID or under different setIDs. This type of setup causes reconciliation issues.

Note. There can be up to three ledger cash accounts per external bank account (one each for Payables, Receivables, and Treasury applications) as illustrated in this table:

In addition:

• Ensure that the same currency code that you specified for the general ledger account is used by the bank account.

  If you configure the bank account with a different currency code than the general ledger account, the bank account displays balances that are revalued in the base currency of the general ledger account in the Book-to-Bank Reconciliation component. This might result in currency rounding errors.

• Run the Journal Generator and Journal Edit and Journal Post processes in General Ledger.

• Generate general ledger trial balances.

The Book-to-Bank Reconciliation Process

Book-to-bank reconciliation is a process where bank-reported balances in the bank statement are compared against the system's general ledger balance for a specified fiscal period. This reconciliation process is generally performed as part of the periodic general ledger closing process (whether that closing process is daily, weekly, or monthly). The process is normally performed after you have posted all subsystem and general ledger transactions to the general ledger and run the trial balance. When a trial balance is run, it is expected that the book balance of a given account will reflect all posted transactions, both reconciled and unreconciled. Discrepancies between the bank statement balance and ledger balance might be due to:

• Time difference items that affect the bank statement, such as deposits in transit or unreconciled checks.

  These are transactions that are booked in the system but not yet acknowledged by the bank.

• First notice items, such as fees or interest accrual amounts.

  These are transactions noted on the bank statement but not yet booked into the system.

With the Book-to-Bank Reconciliation process, you make the appropriate adjustments (or timing differences) to make both balances match. After the balances are matched, you confirm the statement as reconciled and then continue with the general ledger closing process.

Transactions that have been reconciled through the Book-to-Bank Reconciliation process are considered final and are generally not reversed. You cannot unreconcile a transaction that has already been sent to the general ledger.

You also perform the Book-to-Bank Reconciliation process at a period's end to generate accurate reports. The reports list summary reconciliation information for a specific business unit, ledger, fiscal year, and fiscal period.

The Book-to-Bank Reconciliation process is used only with banks that are configured for the Automatic or Semimanual reconciliation process, and you perform the Book-to-Bank Reconciliation process after the Automatic or Semimanual reconciliation process is completed. The Book-to-Bank reconcilation process does not work with the Manual Reconciliation process.

After running the Automatic or Semimanual reconciliation process, select a bank statement as ready for book-to-bank reconciliation on the Book-to-Bank Statements page. This causes the system to change the statement readiness indicator to Ready on the Bank Statement Header table (BANK_STMT_HDR). You then use the Book-to-Bank Reconciliation page to search for bank statement balances to compare against the general ledger balances. By using the Book-to-Bank Reconciliation Details page and its related pages, you can determine what transactions are included in the adjusted balance subtotals for the bank statement and general ledger, and you can reconcile these balances.

A Technical Overview of Book-to-Bank Reconciliation Functionality

The book-to-bank reconciliation functionality integrates with General Ledger, Payables, Receivables, and Treasury applications. In PeopleSoft applications, bank account activity is made up of journal lines, both detailed journal lines and summary journal lines. The Book-to-Bank Reconciliation process determines whether a journal line transaction (regardless of its system of origin) has been reconciled. If a transaction has not been reconciled, then it appears in the appropriate region of the Book-to-Bank Reconciliation Details page, categorized by type. Unreconciled system transactions (such as disbursement checks) appear on the bank side, while unreconciled bank transactions (such as deposits in transit) appear on the system side.

During the Book-to-Bank Reconciliation process, the system searches for all unreconciled (UNR) transactions that fall under the specified general ledger period end. This means that the process includes any outstanding unreconciled bank transactions and adds them as adjustments to the general ledger adjusted balance total.

Note. The Book-to-Bank Reconciliation process leverages the period close end functionality of General Ledger, which prevents posting of journal entries to a closed fiscal period. This means that transactions that are posted to a prior general ledger period are not available to the Book-to-Bank Reconciliation process.

In addition, the system does not include transactions that are posted to adjustment periods in the Book-to-Bank Reconciliation process. (You use General Ledger to create adjustment period entries.)

See Also

Managing Interim and Year End Closing

Making General Ledger Journal Entries

Performing Book-to-Bank Reconciliation

This section discusses how to:

• Select statements for book-to-bank reconciliation.

• Manage book-to-bank ready statements.

• Review book-to-bank reconciliation details.

• Edit payments in transit information.

• Edit deposits in transit information.

• Edit general ledger adjustments information.

• Edit general ledger balance information.

• Edit unbooked fees and interest information.

• Edit unbooked payment information.

• Edit unbooked deposit information.

• Edit bank adjustment information.

• Enter book-to-bank reconciliation comments.

Pages Used to Perform Book-to-Bank Reconciliation

Selecting Statements for Book-to-Bank Reconciliation

Access the Select Book-to-Bank Statements page.

To select bank statements as ready for book-to-bank reconciliation:

1. Enter a Bank ID and Account # (account number).

2. Click Search.

   The results appear in the Available Accounting Periods grid.

3. In the Select column, select the option for statements ready for book-to-bank reconciliation, then click the Select button.

   This action disables the options in the Select column.

   If you select more than one statement for a fiscal year and accounting period, the system designates the statement with the highest Statement ID number as the statement that is used to obtain the closing balance from (this logic assumes that it is the last statement for the period).

The Cycle Status field displays the statement status in the overall reconciliation process:

• Complete: The statement has been loaded and all transactions have been reconciled.

• Ready: The statement has been loaded and reconciliation processes have been performed on the statement.

Managing Book-to-Bank Ready Statements

Access the Book-to-Bank Reconciliation page.

To manage bank statements that are marked as ready for book-to-bank reconciliation:

1. Enter an External Bank ID and Bank Account # (bank account number).

   The specified bank ID determines the accounts that are available to you. You can narrow your search parameters by also entering values in the Fiscal Year and Accounting Period fields.

2. Click Search.

   The results appear in the Available Accounting Periods grid.

3. Click Details to access the Book-to-Bank Reconciliation Details page, where you can review and reconcile balances.

4. Click Recalculate to recalculate balances on the Book-to-Bank Reconciliation page.

   You can only recalculate from the main Book-to-Bank Reconciliation page. However, you can use this functionality only with statements of an In Progress status. For confirmed statements, the Recalculate link is not available.

   This functionality performs two operations. First, it deletes any previously saved data. Second, it recalculates new balances using the original statement balance amounts with any added adjustment data to update any balance data that you changed on the Book-to-Bank Reconciliation Details page.

The Status field displays the status of the Book-to-Bank Reconciliation process for a bank account item, as derived from activity performed on the Book-to-Bank Reconciliations Details page.

Options are:

• New: Indicates the statement is new, and no adjustments have been saved.

• In Progress: Indicates some adjustment work has been saved, but the statement has not been confirmed.

• Confirmed: Indicates the statement has been finalized as confirmed.

Reviewing Book-to-Bank Reconciliation Details

Access the Book-to-Bank Reconciliation Details page.

Reconciliation Data

Editing Payments in Transit Information

Access the Payments in Transit page.