Difference in Bank balance at y/e and Balance Sheet states

[wood1e2]

Hi

I have just been wadding through the queries our accountants presented, one strikes me as slightly strange is the Bank Account balance in the Balance sheet and the atual bank balance.

The bank was reconciled as off the end of the year at £1262.61.

But the Balance sheet states: £4382.27

So I am wondering where does Sage take the a figure that didn't exist?

Or obviously it did, so where do I look to find the difference?

There is no other bank accounts.

[elainec100@cheapaccounting]

sorry to be blunt - have you asked the accountant why there is a difference?

[wood1e2]

He is asking me to provide a reconciliation to that figure...£4382.27

Which I can't as far as I am concerned the bank rec and bank statement all match with £1262.61

[wood1e2]

Having got my thinking cap on is the figure in the Balance Sheet made up of all the cheques posted whether reconcilied (in sage) or un-reconcilied?

[johndon68]

The figure on the balance sheet is the total of all transactions reconciled or not. The reconciled figure will only ever match the balance sheet if ALL transactions on the bank account have been reconciled.

John

[wood1e2]

Right so how do I find out what the transactions were for the year end? So I can show a reconcilied bank account to the Balance Sheet?

[johndon68]

There is no gaurantee that you reconciled bank figure would match the balance sheet. For example lets say you send a cheque to a supplier on the last day of your financial year and you enter this in Sage - this will affect the Balance Sheet figure but wouldn't be reconciled so the figures would never match.

John

[wood1e2]

So how do I reconcile the figures?

Because as far as I am concerned the bank account is reconcilied - with the bank account and that sage balance sheet is incorrect?

[wood1e2]

further to that why would sage reconcile with one figure and produce another figure? That may a question for another day.

At the moment I need to answer the way to find how the difference is.... :)

Or maybe I don't as I am sure the accountant can input a manual figure into his end of year software to show the correct figure as off the end of year!!

[johndon68]

If you are sure that the Balance Sheet is incorrect (bearing in mind what I've already said about the difference) then you need to be looking for the difference...

Few things to check:

1. If you run Check Data, do you get any errors?
2. Does the Trial Balance, balance.

If there are no errors and the trial balance does balance then you need to look at the transactions on the bank account as, if the balance is wrong, there must be one or more transactions that have been entered incorrectly.

John

[johndon68]

further to that why would sage reconcile with one figure and produce another figure? That may a question for another day.

As I've said, the balance on the balance sheet and the reconciled balance are two completely different things and it is possible that they may never be the same...

John

[jim_price]

Casting my mind back a bit here, but I seem to remember a regular issue with Sage was that journal entries are ocassionally entered into control accounts. I would check the nominal ledger activity for the bank current accounts for any JD/JC items.

[wood1e2]

TB balances
Check Data is clear

Clearly there is some highly tuned accounting proceedure here that I am missing.

Why would Sage let you reconcile bank accounts and use a completely differnent figure in the Balance Sheet?

Why would I include cheques not cleared in the Balance Sheet? As that is not Cash at Bank at end of year?

I could have written a cheque for £100,000 post dated for three months, posted it and ended the year according to SAge's Balance Sheet with an overdraft of £100,000. When clearly I was not overdrawn and had actual cash at the bank!!

Crickeys this is going to send me mad as there is a difference on the VAT liability as well!!

[wood1e2]

Casting my mind back a bit here, but I seem to remember a regular issue with Sage was that journal entries are ocassionally entered into control accounts. I would check the nominal ledger activity for the bank current accounts for any JD/JC items.

Although memory fairly bad these days I don't remember using journals to post to Control Accounts...although that may be my issue with the VAT!! :)

[David Griffiths]

At the risk of asking the obvious, the standard report on Sage lists "Bank and Cash" on the balance sheet.

It isn't something as obvious as the cash in hand figure being added to the bank balance, is it?

[johndon68]

Why would Sage let you reconcile bank accounts and use a completely differnent figure in the Balance Sheet?

Because the data is coming from two completely different sources - the balance sheet balance is based on transactions entered, the reconcilied balance is based on transactions that you have told Sage are reconciled.

If you go to the bank rec screen and enter a date that corresponds to the balance sheet date, are there any transactions prior to that date that still show as unreconciled?

John

[Philip Hoyle]

Has Sage taken another (or several) account and included within the "bank" balance figure on the balance sheet?

This often happens if a new balance sheet account is set up wrongly, i.e. instead of it being flagged as a "debtor" or "creditors", it gets flagged as a bank account.

Alternatively are there other "bank" balances, such as petty cash, credit card, deposit accounts, etc., that show separately on a trial balance, but show under the "bank" heading on the balance sheet.

First step I think would be to look for a figure of the difference (between your bank and Sage B/s bank) on the trial balance sheet - it may be obvious or it may be a combination of 2 or more balances.

[wood1e2]

Because the data is coming from two completely different sources - the balance sheet balance is based on transactions entered, the reconcilied balance is based on transactions that you have told Sage are reconciled.

If you go to the bank rec screen and enter a date that corresponds to the balance sheet date, are there any transactions prior to that date that still show as unreconciled?

John

No year end date was 31/10/09

[wood1e2]

Has Sage taken another (or several) account and included within the "bank" balance figure on the balance sheet?

This often happens if a new balance sheet account is set up wrongly, i.e. instead of it being flagged as a "debtor" or "creditors", it gets flagged as a bank account.

Alternatively are there other "bank" balances, such as petty cash, credit card, deposit accounts, etc., that show separately on a trial balance, but show under the "bank" heading on the balance sheet.

First step I think would be to look for a figure of the difference (between your bank and Sage B/s bank) on the trial balance sheet - it may be obvious or it may be a combination of 2 or more balances.

No there is onlu Bank figures, cash is cash, Credit cards are credit cards! :)

[johndon68]

In which case, it is possible, as others have suggested that the figure on the balance sheet is made up of more than one bank/cash account.

If you go to Company -> COA and edit the chart of accounts, you can see the range of nominal codes that make up the figure on the balance sheet.

John

[wood1e2]

COA states that the Bank in current assets is flaoting 1200 to 1209

The only bank accounts in that range are the bank account and the contra account, which is zero.

So if the Balance Sheet states a figure made up off all posted yet uncleared receipts and payments, is there not a report within sage stating what these were?

[johndon68]

The nominal activity report will show you all transactions on the bank account whether reconciled or not.

John

[wood1e2]

Going to sound really thick now...how do you get a 'Normal Activity Report' from reports within Bank on Sage?

As there doesn't seem to be that in my report list!!

[johndon68]

Go to Company -> Nominal, select the Bank Account and choose Reports.

John

[wood1e2]

eureka!!!! :)

Just found a report called 'Un-reconciled Bank Transactions' hidden away in the 'Reconciled Transaction Reports' within the reports section.

Prints off un-reconciled items as at a certain payment.

Bobs your mother brother...

Many thanks for everyones input.

Now onwards with the VAT difference!! :)

[MegKing1994]

Hi

You take your actual bank statement. You run the unreconciled bank reports in sage to your year end date. You add/deduct the figure/s shown on the report/s to your bank statement figure - this should then equate to the accountants figure. Also if you look at your trial balance in sage the 'book balance' should appear there, this is the figure that your accountant should have. If it is not please ask them for their comments on the difference.

Hope this helps.

Please note; some versions of sage have one unreconciled report and some you have to print an incoming unreconciled and an outgoing unreconciled.

[MegKing1994]

silly me - didnt read all the way down before trying to help.

so if a mediator is out there please remove my 2 posts to save my embarrassment.

thanks:D

[Scalloway]

TB balances
Check Data is clear

Clearly there is some highly tuned accounting proceedure here that I am missing.

Why would Sage let you reconcile bank accounts and use a completely differnent figure in the Balance Sheet?

Why would I include cheques not cleared in the Balance Sheet? As that is not Cash at Bank at end of year?

I could have written a cheque for £100,000 post dated for three months, posted it and ended the year according to SAge's Balance Sheet with an overdraft of £100,000. When clearly I was not overdrawn and had actual cash at the bank!!

Crickeys this is going to send me mad as there is a difference on the VAT liability as well!!

Cheques issues before the year end must be deducted from the figure on the year end bank statement. You are correct in saying that if you wrote out a cheque for £100,000 at the year end your bank account on the balance sheet would be overdrawn.

The cheques have presumably been written to pay creditors or directly for expenses. To correctly show your expenditure for the year they must be deducted from the bank balance. If they are not included in your accounts your creditors will be overstated or your expenses underststated.

Your cheques must be entered on Sage as soon as they are written to keep your records up to date. When you reconcile your bank you will have items that are not matched against items on the bank statement. These will be listed in a Sage report Unreconciled payments. The total of this report should be added back to the Sage bank balance to give the total on the bank statement.

Not including unpresented cheques in accounts is a common mistake non-accountants make.