The opening balance changes in a reconciliation when a transaction from previous month, is reconcile

Legacy KB ID: 5651

Question

Opening balance of a bank account changes when a transaction from a previous reconciliation period is reconciled on the current reconciliation period being worked on.

I have finished reconciling the transactions but I’m not getting the option to print the report when I hit ‘Finish reconciliation’, why?

Answer

Important: The contents of this article are for general guidance only and you should seek professional advice relating to your own specific circumstances before acting.

Who does this apply to?

The issue applies to a IPA Books+ user, if you have transactions which are not reconciled in the same reconciliation period as it is recorded and is reconciled in the following period.

The Issue:

IPA Books+ requires all the transactions in a reconciliation period to be reconciled to complete the reconciliation process and subsequently lock the period or view the reconciliation report.

If any transaction is left unreconciled, the process is deemed to be incomplete and therefore a prompt for viewing and/or printing the reconciliation report is not presented (see below screenshot). Irrespective of you clicking on ‘Finish reconciliation’.

Since the process was not completed on your last reconciliation due to some unreconciled transaction(s), your closing balance for that period is now altered. When you reconcile that transaction, it then changes the opening balance for the next period.

Example:

· You are reconciling for January 2018. You perform a monthly reconciliation.

· You have three payment transactions recorded in the bank register in IPA Books+. Transaction 1 for $100, Transaction 2 for $200 and Transaction 3 for $333.

· You get the statement from the bank and it only shows 2 transactions, Transaction 1 and 2. Transaction 3 is not presented to the bank yet.

· You go to reconciliation and reconcile the two transactions that matched your statement.

· Now you finish the reconciliation, by selecting ‘Finish Reconciliation’ button. Notice you will not get the prompt to print the report or lock off the period.

· However, on the same screen, you will notice the closing balance as -300.

· Now you go to February and reconcile February.

· You will notice the opening balance matches correctly to the closing balance for January.

· On the bank statement for February, you see 2 transactions. Transactions 3 that was recorded earlier in Jan and transaction 4 recorded on 1st Feb.

· Now as you reconcile Transaction 3, you will notice the opening balance changes. In this example, it changes to -633.

This is because, when Transaction 3 is reconciled, it being recorded on January affects the January closing balance and finally completes the January reconciliation. Therefore the closing balance for January is now updated by the same amount. This results in changing the opening balance for February.

· Now when you click on Finish reconciliation, it will complete the reconciliation and will prompt you to print the report and lock off the period as well.

Solution / Workarounds:

Option 1: Ignore the opening balance.

If the altered amount matches the transactions that you reconciled from the previous month, please ignore the change.


Option 2: 

Important: Please seek professional advice before proceeding with this workaround as this may affect your BAS / Tax reports.

Change the transaction date. Eliminate the problem by changing the transaction date to the date when the transaction occurred on the bank. By doing this, your transaction on bank statement matches the transaction entered in your book.

Enter the appropriate note or memo on the transaction to indicate this change.


Option 3: Wait until all transactions appear in the bank and reconcile.


Additional information:

You can only print the reconciliation and lock off the transaction when you have reconciled all the recorded transaction in your book, for that period. If not performed, IPA Books+ leaves the reconciliation incomplete and hence the closing balance for the period is not finalised.

Need more help?

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How did we do?

Editing and creating a new ABA file with an updated amount

Removing an account from your IPA Books+ BankData Record

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