Times have changed; banking for most is now online and immediate. Gone are the days of writing out cheques for suppliers, paying in cheques from customers and waiting for the bank statement to arrive in the post.

Of course, in the old days when we did write out cheques and pay in receipts, it was critical to reconcile the bank to your ledger/cash book. You needed to agree the balance on your bank statement with the balance in your ledger and list the items that made up the difference. So, with the advent of on-line banking and payments and receipts being made electronically, do we still need to do a bank rec?

Modern software has kind of turned the bank reconciliation on its head. Instead of making entries in the system and then reconciling with the bank - a two step process, the system brings in the bank statement entries and as you enter/allocate them, they become reconciled - now a one step process. Anything not reconciled or reconciled but not fully allocated is highlighted.

This process can be further enhanced by creating ‘Bank Reconciliation Rules’ that allow the system to automatically make the entry/allocation for you based on a rule that you create. For example; if ‘London Borough of Camden’ appears on your statement, post the value to the ‘Rates’ GL account with the specified description. If you’ve been doing bank recs for years, this might throw you off balance for a bit but persevere…I think it’s really quite good.

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