ANSWER ID:9083

When reconciling a bank account, you'll be able to fix an out of balance by following this sequence of tasks:

1. Check if the out of balance is with the current reconciliation 
2. Check if the account opening balance has been changed
3. Check if a previous reconciliation was "forced"
4. Check if a previously reconciled transaction has been changed or deleted

[Australia only]

Watch reconciliation in action:

[New Zealand only]

Watch reconciliation in action:

Check if the out of balance is with the current reconciliation

To do this:

1. Locate the bank statement you last reconciled your account to and note its closing balance.
2. In your company file, go to the Banking command centre and click Reconcile Accounts.
3. Set the Account field to the bank account being reconciled then press the TAB key on your keyboard.
4. Ensure no transactions are selected as cleared.
5. Compare the Calculated Statement Balance to the closing balance of your bank statement (as noted in step 1).

Correct the current reconciliation

Issues that only affect the current bank reconciliation are easy to identify and correct. Most bank statements include a running balance which you can use to check your reconciliation as you go along.

With the Reconcile Accounts window open and set to reconcile your bank account:

1. Deselect all transactions that you may have selected as being cleared.
2. Looking at your bank statement, note the first listed transaction and the adjacent running balance.
3. Identify this transaction in the Reconcile Accounts window and select it as being cleared.
4. Compare the Calculated Statement Balance with the running balance noted at step 2.
   In the example shown below, the first transaction listed on the bank statement was CR000051. After selecting this transaction as cleared, the Calculated Statement Balance ($2220.00) agreed with the bank statement running balance (not shown).
   
5. Repeat steps 1-4 for each subsequent transaction listed on the bank statement. If at any time after selecting a transaction as Cleared there is variance between the bank statement running balance and the Calculated Statement Balance, carefully check the transaction amount with your bank statement - look for transposed amounts for example $25.25 instead of $25.52.
6. Open the transaction by clicking its zoom arrow and edit its Amount. Click OK to return to the Reconcile Accounts window and continue checking the remaining transactions.

If your bank statement has grand totals for deposits and withdrawals, compare these amounts with those shown at the bottom of the Reconcile Accounts window. If they don't match, you may want to double check with a calculator or spreadsheet or check with MYOB or your bank if you find there is a miscalcuation (on screen or on your paperwork).

If you are still unable to resolve your current bank reconcilation, yet your last reconcilation is in balance, you will need to talk with an accountant to help investigate your data.

When you have fixed your out of balance, it's a good idea to lock the period so reconciled transactions can't be changed. Here's how:

1. Go to the Setup menu and choose Preferences.
2. Click the Security tab.
3. Select the option Lock Period.
4. Specify your reconciliation date.
5. Click OK.

Check if the account opening balance has been changed

Changing a bank account's opening balance will prevent that account from reconciling.

To check this:

1. Restore the earliest backup you have of your company file (File menu > Restore).
2. In the restored company file, go to the Setup menu and choose Balances then choose Account Opening Balances.
3. Compare the Opening Balance of the account you're trying to reconcile with the opening balance of the account in your current working company file.
4. If the account's opening balance has been changed in your current working company file, change it back to its original value.
5. Attempt to reconcile the account.

If your reconciliation is still out of balance, check if a previous reconciliation was "forced".

Check if a previous reconciliation was "forced"

If your bank account was previously reconciled to an amount which was different to the closing balance on the relevant bank statement, this is known as a "forced" reconciliation.

You can check this by referring to:

• the Reconciliation Report from your last reconciliation (or restore a backup of your company file from around the time the reconciliation took place to generate this report), and
• the last bank statement you reconciled to.

The Expected Balance on Statement on the Reconciliation Report should match the closing balance on the bank statement.

If these values match - Check if a previously reconciled transaction has been changed or deleted

If these values DON'T - fix the forced reconciliation

Fixing a forced reconciliation

We strongly recommend you discuss the following options with your accountant prior to making any changes to your company file.

Option 1:  or  the out of balance reconciliations. Once they have been removed, re-reconcile the account using the correct statement closing balances.

Option 2: Record and reconcile an adjustment transaction for the out of balance amount.

• If the Calculated Statement Balance is greater than the bank statement closing balance, use Spend Money to record the adjustment.
• If the Calculated Statement Balance is less than the bank statement closing balanceSimilarly, use Receive Money to record the adjustment.

Here's an example forced reconciliation where the Calculated Statement Balance is less than the bank statement closing balance.

To correct this out of balance:

1. From the Banking command centre, click Receive Money.
2. Set the Deposit to Account field to your bank account.
3. Set the Date and the other transaction details as needed.
4. Set the Acct# field in the lower portion of the window to a ledger account you want to use for the adjustment. We recommend you check with your accountant which ledger account you should be using.
5. So the adjustment isn't reported on the

   [Australia only]

   BAS, use the N-T Tax Code.

   [New Zealand only]

   GST Return, use the N-T GST Code. A sample of the transaction is shown below.
    
6. Click Record and return to the Banking command centre.
7. Click Reconcile Accounts.
8. Set the Account field to your bank account.
9. Enter the Bank Statement Date (we suggest you use the date of the current bank statement).
10. Select the adjustment transaction as being reconciled.
11. Check that the account balances then click Reconcile.
    

When you have fixed your out of balance, it's a good idea to lock the period so reconciled transactions can't be changed. Here's how:

1. Go to the Setup menu and choose Preferences.
2. Click the Security tab.
3. Select the option Lock Period.
4. Specify your reconciliation date.
5. Click OK.

Check if a previously reconciled transaction has been changed or deleted

Deleting or changing a previously reconciled transaction will cause all future reconciliations to become out of balance. So you will find the reason for the out of balance in the first bank reconciliation that doesn't balance.

To do this:

1. Go to the Reports menu and choose Index to Reports.
2. Click the Banking tab.
3. Click to highlight the Reconciliation Report (under the Cheques and Deposits sub-heading) then click Advanced Filters or Customise (depending on your software version).

4. Use the following filters for the report:

1. Click Display. It might be useful to print this report.
2. Compare the report with the corresponding bank statement - do they balance?
   Note: If you have your Reconcilation Report from each of your previous reconcilations, you can compare the "old" Reconcilation Report with the "current" Reconcilation Report for the period in question. This will make it easier to identify changes between what was recorded then and what's in the software now.
3. If the Reconciliation Report and bank statement balance, then redisplay the Reconciliation Report for the next previous Statement Date and check it against its corresponding bank statement.
4. Repeat these steps until the Reconciliation Report balances with the corresponding bank statement. This will identify which reconciliation contains the out of balance.

Note: The reason for the out of balance relates to the 'first' reconciliation that doesn't balance. For example, when checked, the reconciliation for August doesn't reconcile, yet, the reconciliation for July does reconcile. The reason for the out of balance will relate to the August reconciliation.

Once you find and fix the oldest month that is out of balance, check each following month to ensure they also balance.

When you have fixed your out of balance, it's a good idea to lock the period so reconciled transactions can't be changed. Here's how:

1. Go to the Setup menu and choose Preferences.
2. Click the Security tab.
3. Select the option Lock Period.
4. Specify your reconciliation date.
5. Click OK.

Related Support Notes

Reconciling a bank account

Undoing a bank reconciliation

Deleting a bank reconciliation

Deleting a reconciled transaction

Importing Bank Statements using the 'Get Statement' function

Using the Bank Register