Blog

For each bank account a corporation uses, an accountant needs to do a monthly bank reconciliation. This is a timely process which can take up to 4 hours per account if there are a lot of transactions.  A bank account reconciliation is the process of matching the balances on a specified date between the bank balance shown in an organization's bank statement as supplied by the bank and the corresponding amount shown in the organization's own accounting records. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate.

The vast majority of organizations, irrespective of their size, industry sector, or geographic location, spend significant amounts of time manually checking and matching transactions, and preparing and posting journals to complete their bank reconciliations.

Here at Bookkeepingtoolbox.com, we have developed a automated bank reconciliation software that automates the bank reconciliation matching process. It is an online platform where a user can register for an account. The user pastes it's bank transactions from monthly statement for a predefined month on left side of a page or on a separate page (fields include date - description - cheque number - debit amount - credit amount). User pastes it's accounting book transactions for the equivalent period (from excel) on right side of a page or on a separate page (fields include date - description - cheque number - debit amount - credit amount). User also pastes it's result page from previous month reconciliation (outstanding amounts) in other columns or page (more explanation on this lower).

The software matches exact matches between amounts in the accounting column and bank statement column (puts a check besides exact matches). User has the option of making corrections, ie, unchecking and rechecking different amounts. Software has the option to do a bundle search/match where an amount from bank equals many transactions form accounting, ex: $10000 = $5000 + $3000 + $2000, or vice-versa. The result of a bundle match can be expressed as a window showing checked amount form bank ($10000) and checked amount from accounting ($5000 + $3000 + $2000) where user has the option of unchecking and rechecking different amounts to match the amount as there may be many different results. Once this process is done, Software generates a result page where all unmatched amounts are displayed, and where the following addition is performed:  bank balance + outstanding cheques minus accounting balance should equal zero (Difference).

This result page is used in the next month to match entries, ie data on this page has to be reconciliated with the next month. 

This is a fully functional process where you can do bank reconciliations and carry them from month to month and still have access to the previous month.

I have been a freelance accountant and bookkeeper for many years. One of the most tedious task I always found is the bank reconciliation task. Having 20 clients who each have at least 1 bank account, equals to 240 + bank reconciliations per year. Being busy made that I would do the more urgent tasks first and sometimes leave the bank reconciliations for later. I have been in situations where I have done one full year of bank reconciliations during a weekend right at year end !

Bank reconciliation can be frustrating also. After manually checking/ticking the bank entries against the accounting entries, I have often found myself not balancing at the end of a reconciliation. Forgetting to tick an entry makes a big difference at the end and I have often had to start again a reconciliation from the beginning and sometimes more than once.

With the technology that exists, I thought that there must be solution that could help me be more effective with my bank reconciliations. I looked for solutions in excel but never found a solution that did exactly what I was looking for. I also searched for automatic bank reconciliation software but the solutions seemed either geared towards a specific ERP software, towards large corporations or very pricey and not worth spending more that I would end up billing my clients.

With that, I kept on doing my bank reconciliation and kept on being frustrated. Then I decided to develop a software that would be easy to use, quick, efficient and affordable to automate the bank reconciliation process. I started taking programming lessons thinking that I could build it by myself. Eventually, I realized that this was too complex of a task for me and I asked my teacher to program it.

It took about 2 years to program and test and I am now making it available for people who, like me, would like to speed up their bank reconciliation process and be more effective.

So that is the story behind the bookkeepingtoolbox.com website and the Automated Bank Reconciliation Software. Feel free to try it and to give me your feedback, I really look forward to hearing your comments.