Projects:AdvPaymentMngt/User Documentation DRAFT
Reconciliation
This section deals with the process of reconciling the transactions in the Financial Account in Openbravo to the transactions on the bank statement (from the bank). The reconciliation process is the final step in the receivables and payables workflows.
The objective of the reconciliation process is to explain (reconcile) any difference in the end balance shown for the Financial Account in Openbravo and the end balance shown on the bank statement.
In a perfect world these two balances will always be the same; however the reality is that they rarely are. The difference between the two balances can be explained by:
- In the Financial Account
- Payments from customers marked as received (or in transit) in Openbravo that have not yet been been cleared by the bank
- Payments to suppliers marked as paid (or in transit) in Openbravo that have not yet been been cleared by the bank.
In both cases these transactions have not yet been cleared through the banking system and therefore do not yet appear on the bank statement.
- In the Bank Statement
- Payments from customers paid directly into the bank account that have yet to be recorded in Openbravo.
- Standing Orders or Direct Debits paid to suppliers directly from the bank account that have yet to be recorded in Openbravo.
- Interest and fees charged by the bank that have yet to be recorded in Openbravo
- Errors on the bank statement
In these cases the transactions (other than any errors) should be entered into the Financial Account in Openbravo.
As the reconciliation process explains the difference between the two balances, the first step in the process is to review the bank statement and mark as cleared any items that appear both in the Financial Account and on the bank statement (as they have been cleared by the banking system). Additionally, any transactions (receipts and payments) shown on the bank statement that should be reflected in the Financial Account should also be entered into Openbravo.
This process is known as reconciliation as any remaining unmatched transactions will explain the difference between the two balances, i.e., reconcile the balances.
There are two reconciliation processes in Openbravo:
- Manual Reconciliation from a paper Bank Statement
- Automatic Reconciliation using Imported Bank Statement
Manual Reconciliation from a paper Bank Statement
Overview
This process assumes that the user has a copy of the bank statement and wishes to reconcile it to the Financial Account in Openbravo.
Process
To illustrate this process we will assume that there are
- transactions in the Financial Account in Openbravo that have now cleared through the banking system (i.e., they are showing on the bank statement and need to be marked as cleared in the Financial Account).
- transactions on the bank statement (for example bank fees) that need to be reflected in the Financial Account.
- for simplicity (of the user interface) we will illustrate this process using a Financial Account of type "Cash", however the process is exactly the same for Financial Accounts of type "Bank" (only there are a few extra buttons visible in the transactions window that are explained in the automatic reconciliation process below).
- Navigate to Financial Management -> Receivables & Payables -> Transactions -> Financial Account, click on the account that you wish to reconcile, and select the Transactions tab.
- Our example shows that there are two transaction lines in the Financial Account to match; they have a "Cleared" status of "No".
- Referring to my bank statement I can see that the transactions have actually cleared and are now shown on the statement. In order to mark them as cleared I click on the "Reconcile" button.
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- This opens up the Reconciliation window, which shows all the transaction lines that have not yet cleared. Here I can check those items that have cleared by placing a check in the checkbox in the "Cleared" column.
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- First I need to enter the End Balance per the Bank Statement.
- I can check those items that have cleared by placing a check in the checkbox in the "Cleared" column.
- I can see at the bottom of the screen that there is an unreconciled balance. This is because there is Loan Interest shown on the bank statement that needs to be entered in the Financial Account.
- I therefore click on the "Save" button in order to return to the Transactions screen so that I can enter the Loan Interest.
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- I can now see that the two items that I marked as cleared are now marked as cleared, however in order to enter the outstanding transaction for the Loan Interst I now click on the "Add Transactions" button.
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- In the "Add Transactions" window I change the "Transaction Type" to GL Item.
- In the GL Item drop down I select the GL Item for Loan Interest.
- I enter the amount of of the loan interest in the "Paid Out" field and click on the "OK" button.
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- This returns me to the Transactions window where I can now see the transaction line for Loan Interest that I have just entered. Note that this line is not marked as cleared.
- In order to clear this transaction line I click on the "Reconcile" button
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- This returns me to the Reconciliation that I saved earlier.
- I now mark the Loan Interest transaction line as Cleared.
- At this point please note that the Difference between the two balances is now zero, meaning that the two balances are fully reconciled.
- I now click on the "OK" button to complete the reconciliation process.
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- This returns me to the Transactions window where I can see that the reconciliation process completed successfully and I note the reconciliation number.
- There are no unreconciled transaction lines (Note: The "Hide Reconciled Transactions" check-box is selected.)
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- In order to view the reconciliation I click on the "Reconciliations" tab and select the most recent reconciliation.
- This opens up the Reconciliation window showing the detail of the reconciliation performed.
- If I want to I can print the reconciliation report. I have a choice of:
- Reconciliation Detail Report: Shows all the transaction lines that reconcile the two balances.
- Reconciliation Summary Report: Shows only the cumulative values of the transaction lines that reconcile the two balances.
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- In order to view the detail I click on the "Reconciliation Lines" sub-tab.
- This opens up the Reconciliation Lines window showing the detail of the transaction lines that were reconciled.
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Automatic Reconciliation using Imported Bank Statement
Overview
This process assumes that the user receives an electronic bank statement and wishes to automatically reconcile it to the Financial Account in Openbravo.
The automatic reconciliation process involves 3 steps
- Import the bank statement
- Match using the imported bank statement
- Reconcile
Process
To illustrate these steps we will assume that there are
- transactions in the Financial Account in Openbravo that have now cleared through the banking system (i.e., they are showing on the bank statement and need to be marked as cleared in the Financial Account).
- transactions on the bank statement (for example bank fees) that need to be reflected in the Financial Account.
- we will illustrate this process using a Financial Account of type "Bank", as the process is (intentionally) not supported for Financial Accounts of type "Cash".
- we will use whichever matching algorithm is associates with the Financial Account we select. Please refer to the Configuration Manual for more information on defining the Financial Account.
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- Navigate to Financial Management -> Receivables & Payables -> Transactions -> Financial Account, click on the account that you wish to reconcile (making sure you select an account of type "Bank"), and select the Transactions tab.
- Our example shows that there are four transaction lines in the Financial Account to match; they have a "Cleared" status of "No".
- In order to see which transactions have actually been cleared by my bank I must first "Import the Bank Statement" by clicking on the button.
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- This opens up the "Import Bank File" window.
- I select the location of the bank file and the format of that file (for illustration purposes we will use a Spanish bank file format).
- I then click on "OK".
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- I am returned to the transactions window where I can see that the import process completed successfully.
- I now want to "Match using Imported Bank Statement", so I click on that button.
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- This opens up the "Match using imported Bank Statement Lines" window.
- I can filter the contents of the window to show:
- Deposits and Payments
- Deposits only
- Payments only
- The window is divided into two sections:
- The left hand section shows the Imported Bank Statement Lines and in my example I can see the three lines of the bank statement that I successfully imported in the step above.
- The right hand section shows the Transactions in Openbravo that have been automatically matched to the lines in the bank statement. The logic used for matching is defined by the matching algorithm associated with this Financial Account. Please refer to the Configuration Manual for more information on associating matching algorithms to Financial Accounts.
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- I can see that there is a clear match for the first two lines, so I accept the proposal and mark them as a match by clicking on the checkbox in the "Match" column.
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- For the third line I can see that the bank has made a payment to "Demo Business Partner" for 16.00 (this may have been a direct debit or standing order transaction). I therefore need to add the payment to my Financial Account in Openbravo. In order to do this I click on the "Add" option in the transaction line.
- This opens up the Add Transaction" window.
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- In this window I want to add the Payment that is shown on the bank statement, so I leave the Transaction Type as the default "Payment"
- In the Details section I change the Document to "Paid Out", which shows a list of previously paid items for this Business Partner.
- In order to add the new payment I click on the "Add Payment" button.
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- I enter the payment document number
- In the "To be Paid To" dropdown I select the Business Partner and at this point the system automatically brings up the list of unpaid documents.
- I select the Payment Method
- I filter by Transaction Type on
- Orders
- Invoices
- Orders and Invoices
- I select the item for which payment was received and the system automatically completes the payment amount.
- I then click on the "Process" button
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- In the following window you are asked how you want to process this transaction. As this payment has already been cleared by the bank I select "Process Made Payment(s) and Withdrawal"
- I then click on the "OK" button
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