Account Reconciliation

[DonaldFish]

I am confused about Accounts Reconciliation. I clear the checks in my Cash on Hand account, but nothing happens. Shouldn't my Regular Checking account be increased? Step by step help would be appreciated. I am a novice. Thank you.

[JB Brown]

I see that you too are a novice at Peach Tree, I am just learning myself and was wondering if there is anything that you would suggest for me to purchase (book, manual) etc...

I have always worked for smaller companies before, and am used to old accounting software, so Peach Tree is a little confusing in this early stage of the learning game.

I would appreciate any information you could pass along to me.

Thanks

[DonaldFish]

I have not found any books locally, but there are some available from Peachtree (expensive) or for older versions.

My best tip is to save a copy of all my data before I do anything major, so if I make a mistake, I can just move back to before I made the mistake.

I have not found the answer to my question yet, but I am working on it. When I CLEAR a check what happens? Nothing seems to happen! How do I get my deposits in the correct account? I have figured most things out, but this one is perplexing.

[SBTBILL]

By clear the checks, do you mean post them as paid. If that is the case then you probably deducted the amount when you issed them.

Bill Couture

[DonaldFish]

This is what the problem is: When I get checks in, I put them in my CASH ON HAND account. However, after I SELECT FOR DEPOSIT and later CLEAR the deposit while reconciling my CASH ON HAND account, I expected my REGULAR CHECKING ACCOUNT to be credited, but instead nothing happens in account details. I must be doing something wrong, like missing a step.

I also need to be able to do more complicated deposits, such as with cash withdrawals and into my OWNER’S DRAW account.

Thank you.

[Diane Koers]

By design, when you Select for Deposit, the checks don't move to a different account. They simply are assigned a deposit ticket ID for reconciliation purpose. You would still need to create a GL journal entry to transfer from Cash on Hand to Checking.

BTW: There is a great book out there! <g> "Peachtree for Dummies" and it's been updated for 2002.

[Unregistered]

Posting the checks to Cash on Hand is an unusual and probably uneccessary step. Just post them directly into the account where they are deposited.

The only time that you may need to account for the unposted checks is at the end of a financial period when you need to make sure the income statement and balance sheets are current. The simplest way to deal with that issue is to make a reversing general journal entry for the amount of the checks dated the last day of the accounting period.

The cash withdrawal into the owner's draw account can be conducted in several different methods. I would set up the owner as a vendor with the owner's draw account as the default and using the payments feature. You could also use a general journal entry.

Nick

[DonaldFish]

So some of these tasks, such as ‘Save for Deposit’ and ‘Account Reconciliation…,’ are just for convenience and can be ignored? And, on deposit day, I can use the ‘General Journal’ to move amounts from my CASH ON HAND account to the cash and/or equity accounts where it is going (checking, petty cash, owner’s draw, etc.)?

[Diane Koers]

That's correct. You don't have to actually use the "Select for Deposit". It simply helps you organize your deposits. As for Account Reconciliation feature...nothing bad will happen if you don't use it, but it's a great and easy feature you can use to reconcile your PT accounts to your bank statement.

[Unregistered]

Account reconciliation is useful for reconciling the credit card statement in addition to the bank statements. It is an important and useful tool for verifying that these account balances are correct.

Nick

[DonaldFish]

Thank you. This has helped a lot. I am sure reconciling accounts is useful, but I wanted to distinguish between what is necessary, and what is optional. Since I deposit checks only twice a month, I use the CASH ON HAND account to store them in the interim. Unfortunately, this seems to make reconciling more complicated, but I am working on a way of doing it.

[Unregistered]

I am intrigued by the suggestion to set up the owner as a vendor, and pay that vendor for owner’s draws. What is the idea here? What are the benefits? Is it just as good to use the General Journal?

[Diane Koers]

Setting up the owner as a vendor serves a two fold purpose. One, the owner can write himself a check, and two it defaults to the correct gl account number.

[Unregistered]

What about this situation for an owner’s draw: What if a check, from a previous period and therefore in a holding account, was deposited directly into the owner’s personal account? Should this be transferred using the General Journal? Or should I still apply the technique of transferring the amount of the check using the Payments module?