Microsoft Dynamic GP 2010 : Bank Reconciliation

The Bank Reconciliation module is also sometimes referred to as Bank Rec or Cash Management and it is part of the Financial series in Dynamics GP. The menu choices for Bank Reconciliation will start with Financial, while the SQL tables will start with CM. Setup for the Bank Reconciliation module consists of two steps—setting up Checkbooks and Bank Reconciliation Setup.

Checkbooks

A Checkbook in Dynamics GP represents a bank account. In a typical company, each individual bank account will have a unique General Ledger account. The Dynamics GP checkbook setup will allow you to link each bank account to a GL account and keep track of the next available check and deposit numbers for the bank account. Most modules in Dynamics GP use a Checkbook ID (as opposed to the GL account number) to represent a bank account.

You can create an unlimited number of checkbooks in Dynamics GP. To set up or modify a checkbook, navigate to Cards | Financial | Checkbook. Following are explanations for the fields on the Checkbook Maintenance window:

• Checkbook ID: The Checkbook ID is alphanumeric (up to 15 characters) and will be used throughout Dynamics GP to identify a bank account. It is recommended to make this ID something easy for users to identify. For example, if you have multiple accounts with the same bank, consider what users typically call them. The IDs might represent their names such as CHASE CHECKING and CHASE SAVINGS, or maybe contain part of the account number such as CHASE 1833 and CHASE 5869. Once created, the Checkbook ID cannot be changed without the purchase of an additional tool.

• Description: The name of the bank account and what will help users identify the correct bank account in a list if the Checkbook ID is not enough. This will allow up to 30 characters. If there are multiple similar accounts, consider putting the account number, or part of it, into the description, especially if it is not part of the Checkbook ID.

• Inactive: Once a bank account is no longer used, you can make it inactive to prevent users from entering transactions to it. Inactive checkbooks still show up on inquiries, but attempting to enter a transaction for one will result in an error.

• Currency ID, Payment Rate Type, and Deposit Rate Type: Choose the appropriate currency and rate types for the bank account.

• Cash Account: The GL account corresponding to this bank account. It is important to have a one-to-one relationship between bank accounts and GL accounts to allow for smooth bank reconciliations.

• Next Check Number: Enter the next check number you will be using. Dynamics GP will automatically increment check numbers as checks are printed or entered in various modules. Note that you will need to manually increment the number of digits. For example, if you have set up the check number with four digits, once you reach 9999, the system will not automatically go to 10000, it will update to 0000. While you can add more digits at any time, this will not update check numbers that have already been used, so your check numbers will have different lengths and may not sort properly on lookups or reports. Consider entering an extra zero or two in front of the numbers at the onset, so if your next check number is 6001, you could start with 06001 or 006001, depending on the expected volume of checks.

• Next Deposit Number: Enter the next deposit number you would like to use. Typically deposit slips are not numbered, so this is more of an internal number. Many companies like to use the prefix DEP to clearly identify deposits on a list of bank transactions. As with the check numbers, the deposit numbers will not automatically increment the number of digits, so it is recommended to use a number with enough total digits to last for some time.

• Company Address ID, Bank Account, and Bank ID: These fields are optional and, unless needed by other modules, most companies typically leave these blank.

• User-Defined 1 and 2: If there is additional information you would like to track about your bank account, you can use these two fields. The labels for these can be changed on the Bank Reconciliation Setup window (Microsoft Dynamics GP | Tools | Setup | Financial | Bank Reconciliation).

• Last Reconciled Balance and Date: These are used to populate your last reconciliation information prior to starting to use Dynamics GP Bank Reconciliation. You can leave these blank until you are ready to perform your first bank reconciliation.

• Payables Options:

  • Max Check Amount and Password: With these you can limit the maximum amount for payables checks and optionally set up a password to override the maximum. Leaving the amount at zero will allow checks of any amount to be created.

  • Duplicate Check Numbers: It is recommended to uncheck (disallow) this option so that duplicate check numbers are not inadvertently entered, thus causing problems during bank reconciliation.

  • Override Check Number: Usually it is helpful to leave this checked (allowed), so that when payables checks are printed, the user can override the next check number if for some reason it is not coming up correctly.

The following is an example of a typical Checkbook Maintenance window:

Bank Reconciliation Setup

Bank Reconciliation setup determines the defaults for the Bank Reconciliation module. If you are not using the Bank Reconciliation module, or not implementing it yet, you can skip this step. To open the Bank Reconciliation Setup window, navigate to Microsoft Dynamics GP | Tools | Setup | Financial | Bank Reconciliation. The following list explains the fields on this window:

• Next Number: This will be the next number used on a bank transaction or bank transfer. This is an internal number and there is typically no reason to change this from the default; it will increment automatically as needed.

• Transaction Type, Description, and Code: These are default descriptions and codes assigned to each type of Bank Reconciliation transaction. It is recommended not to change these descriptions and codes, as having them differ from the defaults will make it difficult to consult with others about any questions you might have on the Bank Reconciliation module.

• Reconcile Adjustment Type, Description, and Code: Similar to the previous option, these are descriptions and codes assigned to Bank Reconciliation adjustments and changing them is not recommended.

• Maintain History: This is checked by default, it is recommended to leave it selected and keep all history.

• Defaults:

  • Checkbook ID: Optionally, you can specify a default Checkbook ID for your Bank Reconciliation transactions. This may save time during data entry if most bank transactions use the same bank account. Checkbooks have to be set up first to be able to select them as a default. If there are many checkbooks being used, consider leaving this default blank to force users to pick a checkbook for each transaction. Note that if the Multicurrency module is enabled, most Dynamics GP windows will not use this checkbook ID default.

  • User-Defined 1 and 2: This field allows you to change the labels that appear for the user-defined fields on the Checkbook Maintenance window.

The following screenshot shows the Bank Reconciliation Setup window: