Reconciling Bank Statements

How do I reconcile my first bank statement?

There are three ways you can start reconciling Goldenseal against your bank statement. Once you have reconciled the first statement, it is easier to reconcile subsequent statements as they arrive.

HINT-- The goal in bank reconciling is to balance to the penny every period. Tracking down small differences can take some time, but it's usually easier than trying to "fudge" each period against an inexact balance.

Reconcile the First Period-- Exact Data Entry

If you want to make reconciling very easy, enter all records for the first bank period when you start using Goldenseal-- even if a few transactions are in a previous month. This method is easiest to do if you start entering Goldenseal records as of the starting date of a previous bank statement that you already have.

Follow these steps:

1. Find the account starting balance on the bank statement.
2. Open the bank account record, and enter that amount into the Starting Balance field in the account.
3. Enter all bank transactions from the bank statement into Goldenseal. Don't enter any transactions from previous statements.
4. Fill in the Statement field in every bank transaction record that is on the statement.
5. Choose Reconcile from the Accounts menu.
6. Fill in the current reconcile period and click OK.
7. Goldenseal will show you the reconciled account balance. It should match with the final balance on the bank statement. If not, check the records to see what is missing.

HINT-- To see a list of all checking transactions, choose Bank from the Reports menu, and choose Checking Transactions from the submenu. Hit the Update button to fill in values.

Reconcile the First Period-- Calculated

If you start using Goldenseal at a specific date, your records probably won't match up exactly with any bank statement. That means you'll need to do some math to get the first period to balance.

Start with the very first bank statement that includes any transactions that are entered into Goldenseal (even if there are only a small number of items in that period).

Make the following calculation:

1. Take the starting balance on the bank statement.
2. Subtract any deposits or credits on the statement that are not entered into Goldenseal.
3. Add the amount of any checks or payments on the statement that are not entered into Goldenseal.
4. Enter the resulting amount into the Starting Balance field in the bank account record.

After you have done that, follow these steps to reconcile the account:

1. Fill in the Statement field in every bank transaction record that is on the statement.
2. Choose Reconcile from the Accounts menu.
3. Fill in the current reconcile period and click OK.
4. Goldenseal will show you the reconciled account balance. It should match with the final balance on the bank statement.

Reconcile the First Period-- Trial Balance

If you hate math, use the following "trial and error" method to reconcile the first bank statement:

1. Fill in the Statement field in every bank transaction record that is on the statement.
2. Choose Reconcile from the Accounts menu.
3. Fill in the current reconcile period and click OK.
4. Goldenseal will show you a theoretical reconciled account balance.
5. If the theoretical balance matches the final balance on the bank statement, you are done. If the theoretical balance is bigger than the statement balance, open the bank account record and reduce the Starting Balance field by the difference. If the theoretical balance is smaller than the statement balance, open the bank account record and increase the Starting Balance field by the difference
6. Repeat steps 2 to 5 until the reconcile amount is the same as the bank statement amount.

Reconcile Later Periods

Once you have reconciled the first bank statement, it is easier to reconcile following statements.

Just be sure to always reconcile in chronological order. You need to get one month to reconcile exactly before you can move on to the next month's statement.

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