[StressedGuy]

Good day everyone,


I have tried to make sense of a bank reconciliation for a business over the last few weeks and I am having major issues. I'm actually doing a historical bank reconciliation, and funds were considered stolen, however I am still unsure of how to make sense of this, so please - any help will be greatly appreciated.


The following is the information:
Bank Reconciliation July 2011




Balance as per. G/L June 2011 = -340,746.33


Total Cheque Payments for July 2011 = 1,466,477.89


Bank Charges = 387.50, 618.50, 512.50, 550.00, 526.50, 612.50, 500.00 and 1,876.70


Total Deposits = 1,369,507.45
Balance as per. G/L July 2011 = -443,300.97


Outstanding Cheque Payments = 58,279.08, 69,008.29, 51,660.75, 69,588.74, 5,631.36, 63,596.40 and 63,344.80


Outstanding Deposits C/f = 40,911.74


Outstanding Deposits (July 2011) =
22-25/07/2011
1,119.85 and 1,100.00 (Received by bank next month)
Deposit Book value on 22-25/07/2011 = 129,499.84
Total of Deposit (that was received by bank) on 22-25/07/2011 = 127,280.75


28/07/2011
1,198.00 (Received by bank next month)
Deposit Book value on 28/07/2011 = 84,202.88
Total of Deposit (that was received by bank) on 28/07/2011 = 83,007.15


29-31/07/2011
86,915.41 (Received by bank next month)
Deposit Book value on 29-31/07/2011 = 112,994.70


Items in Bank Statement not in G/L Deposit = 10,000.00 and 891.25


Shorts in Deposit = 2,417.24


Balance = -211,038.80
Balance as per. Bank statement = -186,775.84


Total amount deposited = 1,355,168.16
Total amount withdrawn = 1,247,523.23
Opening Balance = -294,420.77
Closing Balance = -186,775.84


*** I was shown the method on getting the bank reconciliation to balance and followed the EXACT procedure I was shown, re-did it many times and re-checking all the information, so I am very certain that I missed no piece of information, yet for some reason the balance does not ever come back to what is on the statement. There are no missed deposits or anything because I do not see them show up in August 2011's bank statement. I've spent weeks stressed with this, and I really need any help possible. Please, can someone help me or give me any advice on what could possibly be the issue? Any information you may need to balance, please ask and I will provide it.

[paraclete]

Having been through a real life situation like this we ultimately found a number of deposits that didn't match the actual deposit in the bank, ie fraud but there is nothing else for it but to check off every entry and make sure you have missed nothing. Do the reconciliation in small sections to isolate the point the discrepancies begin

[StressedGuy]

I checked off every item, I'm 100% sure all of my calculations are correct. What exactly can cause such an error to occur? Also how can I do the reconciliation in small sections?

[paraclete]

Well you are dealing with bulk data so you have to start again transaction by transaction and make sure your starting balances are correct, ie, check the opening data you have been given against the opening balance, sometimes a balance day adjustment has been made after the reconciliation was done and the reconciliation not updated. I observe that there are no outstanding cheques brought forward, very unusual. if you can check payments made plus less outstanding cheques equals cheques paid at bank. what look for transposition errors such differences usually divide by 9 and decide whether the actual difference is material

[joypulv]

I'd work on it but parts of it are too vaguely termed, you need the past history, and you don't say what you got. I think you need a better sense of steps along the way, steps that should balance along the way. And what if the GL for July is wrong? Leave that out. ETC! Are you doing this as someone who really understands accounting, or as someone who was just given a set of instructions?

[StressedGuy]

I was given a set of instructions, and shown what to do. I'm not an accountant, but I offered my assistance to get these historical bank reconciliations done because the situation that the business is in right now just needs the help, and I offered.

I gave the bulk figures because it would have been too much to type out. But I believe the G/L for July is the problem, as everything else has checked back to the bank statement. However I calculated the G/L the way that I was shown, and checked it back.

[paraclete]

What do you mean you calculated the G/L? What is usual in the bank reconciliation process is there are two statements. A ledger balance statement which takes the opening ledger balance and transactions for the period and calculates the closing balance, this will also include transactions arising from the bank which haven't been entered in the ledger. You appear to have that information. Then there is the reconciliation statement which starts with the closing bank balance and adjusts for outstanding entries yet to impact the bank account and should equal the G/L balance. Sometimes entries are made in the wrong statement which result in them not being added or deducted in the right manner, and then there are errors which should have been picked up, such as dishonoured cheques in deposits and other adjusting entries which have to be taken into account in either the G/L or the bank statement. I'm not going to do the calculations for you but as I said before you should determine whether the difference is material. What is meant by that is if the difference is only a few dollars when the transactions total hundreds of thousands then an adjustment should be made rather than excessive time being spent, what I see is there might be a discrepancy of some $200 and there are certainly minor differences in the value of deposits so you may have missed other discrepancies

the Process is

Opening ledger balance less payments plus receipts Plus/minus transactions originating in the bank equals closing ledger balance. Watch for change of sign when overdraft
Closing Bank Balance plus outstanding deposits less outstanding cheques equals closing ledger balance

Also check if there is more than one bank account in use

I have seen this sort of thing before in large corporations with branches where daily transactions are summarised