The cash book of a business is the record of how much cash the business believes that it has in the bank. In the same way, you yourself might keep a private record of how much money you think you have in your own personal account at your bank, perhaps by making a note in your cheque book of income received and the cheques you write.
If you do keep such a record you will probably agree that when your bank sends you a bank statement from time to time the amount it shows as being the balance in your account is rarely exactly the amount that you have calculated for yourself as being your current balance.
Why might your own estimate of your bank balance be different from the amount shown on your bank statement?
There are three common explanations.
Error in calculation, or recording income and payments, are more likely to have been made by you than by the bank, but it is conceivable that the bank has made a mistake too.
2. Bank charges or bank interest.
The bank might deduct charges for kredit ohne kontoauszug interest on an overdraft or for its service, which you are not informed about until you receive the bank statement.
3. The differences
There might be some cheques that you have received and paid into the bank, but which have not yet been “cleared” and added to your account.
Similarly, you might have made some payments by cheque, and reduced the balance in your account accordingly in the record that you keep, but the person who receives the cheque might not bank at a while.
If you do keep a personal record of your cash position at the bank, and if you do check your periodic bank statements against what you think you should have in your account, you are doing exactly the same thing that the bookkeepers of a business do when they make a bank reconciliation.
MYOB – How to Reconcile a Bank Statement
In the Banking command centre, click on Reconcile Accounts. At the top of the window choose the Account Code you wish to reconcile. This commonly is the Cheque Account but you can also reconcile saving accounts, petty cash accounts, credit cards or any other accounts that have been set up as Bank Accounts. Enter the Date from the bottom of your Bank Statement and the Balance on your Statement.
A list of all the Deposits and Withdrawals that you have entered in MYOB will appear in the window. These Deposits and Withdrawals will be transactions that you have entered by Receiving Payments in the Sales command centre, Paying Bills in the Purchases command centre, Spending Money and Receiving Money in the Banking command centre.
Using the transactions recorded on you Bank Statement, check off only the matching transactions by clicking in the Left Hand column under the check mark. As you do this MYOB will Calculate what it believes your Statement Balance should be. You will come across transactions that you have not entered such as Bank Fees or Interest Received which can easily be added by using the Bank Entry option at the bottom of your window. Simply click on this and add the Amount, I.D., Date, Expense or Income Account Code, check that the Tax Code is correct and Record the transaction. This will now appear in the Bank Reconciliation window and will need to be checked off.
The Get Statement option is an advanced feature and is outlined in my Becoming A Pro video series in which it shows you how to download and import a statement into MYOB and then how to match the transactions you have recorded in MYOB to the bank statement. The Undo Reconciliation is self explanatory and is used when you have mistakenly reconciled your account only to find a transaction was incorrect and needs to be re-entered.
MYOB will not allow you to Reconcile the account if it is Out of Balance. Some reasons for this are simple transposing of numbers i.e. $100.63 was entered as 100.36. If you have an Out of Balance amount you must find the incorrect entry and correct it or add any transactions you may have left off.
Once you have Balanced your account you then click on Reconcile at the bottom of the window. A small window will appear prompting you to Print Report before completing your Reconciliation. It is advisable to print this report so that you have a hard copy to attach to the Bank Statement. Once you have completed this report, you will be taken back to the Reconciliation window where you click Reconcile again and Reconcile in the smaller window. All the xCleared Transactions will now disappear leaving only the Unpresented Deposits and Withdrawals that have not yet appeared on the Bank Statement.