5/7/19 9:13 AM

"Uh-oh...the bank made an error! What now?" How to fix bank and book balance discrepancies

how to fix bank and book balance discrepancies

Have you ever received word from your reconciler that there is an amount that cleared the bank that does not match what you have posted in your ledger, or maybe it is not even posted at all? Discrepancies between the bank and book transactions can occur for a variety of reasons. While the reasons for the discrepancy are important, it's more important to know how it can be corrected, so that your account will remain balanced three ways

Below, we'll provide an example of this type of situation and show you how it can be corrected. 

The Situation: 

Jane posts and issues a check in April for $850.00 dollars in ProTrust - the bank clears the check in April for $800.00 ($50 difference). After confirming that the bank made the error, the bank corrects the error with a $50 debit in May.  

What's the problem? 

The problem caused by this error is that you have an $800 debit to clear in April, and you do not have a check posted for this amount to clear in ProTrust. Without clearing the $800 that cleared the bank, your bank balance will be incorrect. 

What should I do? 

Clear the $850 check in April. Post a $50 credit in April with the date that the $800.00 check cleared the bank as the transaction date and the clear date. By doing this, your bank balance will be correct. It's important that when the $50 credit is posted, that the original check is referenced and a memo stating what happened is entered with the transaction. When the bank makes the correction in May, the additional $50 debit (correction) will show up on the May statement. This debit should be posted in ProTrust to the same ledger, again referencing the original bank error. 

In this situation, you should not change the posted amount of your check to $800 because you did not make the error. If you had posted the check wrong, then you would correct the original posting. 

Let SoftPro help take the stress out of reconciliations.  

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Topics: Reconciliation

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