The Bank Reconciliation Screen

Academies Finance

STAR ACADEMY – User Guide

Section 12 - Bank Reconciliations

Section 12 – Bank Reconciliations Page 1 of 19

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About Bank Reconciliations Any non-journal transaction posted within Star Academy is saved as an unreconciled transaction. The purpose of the Bank Reconciliation is to mark-off those transactions as reconciled when they appear on a Bank Statement. For the sake of clarity this excludes commitments (i.e. Orders made but not yet received and paid and Invoices raised but for which no payment has yet been made). Bank Reconciliations must be reconciled to the last day of each calendar month i.e. 30th April, 31st May etc. If your Bank Statement continues past this date you should draw a line under the last day of the month and reconcile to the balance shown at that date. Petty Cash must also be reconciled each month, with the reconciled total agreeing with your cash in hand at the end of the month (see Section 11).

The Bank Reconciliation Screen From the Main Menu select the ‘Process’ tab, then ‘Bank Reconciliation’:

Please Note: The Find button is a very useful tool if searching for transactions. See Section 8 - Searching for Transactions for instructions.

Unreconciled

Transactions Transactions to

be Reconciled

Reconciled

Transactions

Bank Account

Reconciled

Account Details

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Reconcile Transactions

The “Cheque No.” field allows you to search for a specific cheque number/credit card date/direct debit date/Paying in slip number without having to scroll through all the entries that could be shown on the Bank Reconciliation statement

The drop down arrow it will display a drop down list of all items that are ready for reconciliation – all you have to do is scroll down the list to find the one you want to reconcile.

1

Enter the Number of the Bank Statement to be reconciled.

2

Note: This provides a running total to check the reconciliation as you are processing.

At the outset the Balance at Bank figure should agree to the Opening Balance on the Bank Statement.

Select the Bank Account to be reconciled

Unreconciled transactions are

grouped by Cheque Number.

NB If no Cheque Number appears the transactions will be on the Cheque Run waiting to be processed.

3 Select the Transaction to be reconciled

This total shows the net bank balance should all unreconciled entries be reconciled.

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If you know the first character of the payment/income item you are looking for enter it in the box and tab away - the first entry in the list that has this first character will be highlighted – for example if you want find the then enter “C” in the box and tab away – the first Credit Card Payment entry will be selected:

You can then select this or scroll down from this point to find the entry you do want to select.

OR

Highlight a cheque to be reconciled

Click this button to select every unreconciled transaction that can be reconciled ie: excludes items still awaiting payment.

To Reconcile you can either: A) Double clicking the cheque here will automatically highlight it within the part

of the screen showing the transactions selected for reconciliation B) Highlight the items individually within this list C) Click here to select/deselect all items from the list.

4

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As you select items from the list you will note that the ‘Total Selected to Reconcile’ is updated. To reconcile the items selected click After the Reconcile button has been clicked the transaction(s) will move to the reconciled transactions section at the bottom of the screen:

The Reconciliation process will automatically save after each item has been reconciled. To exit without saving you can Unreconcile.

After completing the Reconciliation this figure must agree to your closing Bank Balance as at the last day of the calendar month.

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Unreconcile Transactions If for any reason you have reconciled a transaction in error, or wish to begin the reconciliation process again, you are able to Unreconcile.

Click on this button to see a list of all reconciled statements.

Double click on the statement number to display all the transactions reconciled on that statement.

Reconciling the Petty Cash Account The Petty Cash account is reconciled in exactly the same way as described above. However, you must ensure that the Petty Cash account is selected from the Bank Account drop down box at the top of the screen. For this Account there will be no Bank Statements to reconcile against, instead the completed expenditure and income Vouchers filed in the Petty Cash tin will be used. See Section 11 for a more detailed explanation.

View Prior Reconciled Statements If you wish to view any previously reconciled Bank Statements please click

Show Reconciled Statements: A list of all prior reconciled Bank Statements will then appear behind the Reconciled Balance box. Click Hide Reconciled Statements to close this list.

Highlight the transaction in the reconciled transactions section and click Unreconcile. You can select all by

clicking the

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All of the transactions listed in the reconciled transactions section of the screen will relate to the Bank Statement that was double clicked as above.

A report detailing all the reconciled items relating to the requested Statement Number will then be shown. This can then be printed if required:

Double click the Statement Number you wish to view

Please Note: All Journals are reconciled to Bank Statement “-1”

If you would prefer to view a paper copy of the reconciled

transactions click Print Reconciled Cheque Details

Enter the Bank Statement Number you wish to view reconciled details for and then click ‘OK’

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V6.10

Entering VAT Reimbursements Please Note: The ‘Period End’ process will automatically create an entry in the Reimbursements (Record of VAT Claims) screen for the current period VAT Reimbursement. When this entry appears on a bank statement it should be reconciled as follows (see Appendix A for the rules regarding Multi Academy Trusts):

When the Rec’d / Paid box has been ticked the Reimbursement amount will be displayed in the Amount this Month box. If you have selected more than

Any outstanding Reimbursements for the Academy will be listed on this screen.

When the transaction appears on your Bank Statement place a tick in the

Rec’d / Paid box.

Select ‘Bank Reconciliation’ then

press the VAT button.

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one Reimbursement this amount will be the cumulative total of the Reimbursements you wish to reconcile. The Rec’d / Paid Date will be set to today’s date – this can be overwritten with the date shown on the Bank Statement if required. Once this amount matches the amount received on the Bank Statement click Create Transaction. This will create the Reimbursement transaction and return you to the Bank Reconciliation screen.

Creating a Cheque for Negative Reimbursements If the VAT from the Academy’s income exceeds the VAT reclaimable from its expenditure the amount to be ‘reimbursed’ will be a negative figure. To clear this negative figure you will need to send a cheque to HMRC or pay them online after completing a Period End process (during which the VAT Claim will be prepared).

The VAT Reimbursement will have the Cheque Number ‘Reimb’ and Supplier Name ‘HMRC’ (and the total shown will include any previous VAT Reimbursements that have not yet been reconciled). Reconcile this transaction as normal.

Place a tick in the Rec’d / Paid box, and then double click the Issue Cheque box.

Click Create Transaction.

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If you have the Cheque Printing option activated within Star Academy you will then need to process the payment via the Cheque Run screen (see Section 9). A Supplier Name of HMRC will have been allocated together with a Cheque Number of “VAT – dd mm yy”. At this point you will be given the option of paying by cheque or Direct Debit. If you choose the Direct Debit option the Cheque Number will be replaced with the normal “DD dd/mm/yy”. If you do not have the Cheque Printing option activated within Star Academy you will be prompted to enter a Cheque Number and Cheque Date.

If the Issue Cheque box is not ticked and you press the Create Transaction button your decision will be queried, enter Yes if you want to proceed without creating a cheque and the payment will be entered in the unreconciled section of the Bank Reconciliation screen with the Cheque Number shown as ‘Reimb’. This will allow you to record the online payment of your VAT to HMRC. Whichever payment method is used you should reconcile this transaction as normal when it appears on your Bank Statement.

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The Reconciliation Statement From the Main Menu select the ‘Process’ tab then click ‘Reconciliation Statement’. The balances shown below on the Reconciliation Statement are automatically generated as you reconcile your accounts. Check that the Balance at Bank figure agrees with your actual Bank Statement. If it does not agree you must return to the Bank Reconciliation process to correct.

The difference between A and B must equal zero.

Current month’s expenditure

Prior month’s Reimbursements due posted in this month and any Capital Expenditure - (‘Future Year’ Capital Expenditure will be included in the ‘Current Month’s Expenditure’ figure above).

Unreconciled transactions

Cumulative Bank Balance (see below)

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Reconciled Balances

If an unreconciled transaction from a closed earlier period is subsequently reconciled it will have affected the Balance at Bank and Unpresented Transactions figures if the Reconciliation Report is produced again after the reconciliation has been performed. If an unreconciled transaction has been posted to an Accounting Period later than the one currently being reported on by this report then it will not be included in the Unpresented Transactions total shown in this report. Please note that a consequence of this rule is that where a cheque has been drawn for two or more transactions that cover different periods the transactions covered by this cheque for later periods will be excluded from this report. Period 1 - If you recorded a Capital future payment before the Preliminary Year End then in the Period 1 Reconciliation Statement run after the Preliminary Year End its "control" entry is counted as normal expenditure and is included in this total whilst the newly posted Capital expenditure amount is included in the "Balance sheet" entry in the Reconciliation statement. The entries will balance out in total so no overall imbalance is caused but you should be aware that you might see unexpected large amounts should this situation arise.

Ensure that the these balances agree with your actual bank account balances

This should be the Balance at Bank(s) figure from the Reconciliation Statement, which is a cumulative total of all bank accounts held in Star Academy.

Total of any outstanding VAT Reimbursements (including this month’s) not yet posted.

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Reconciled in Future Period report During the Period End processing an additional report will be printed at the same time as the Reconciliation Statement – this the “Reconciled in Future Period” report and will be produced when transactions from future periods have already been reconciled. In the example on the following page a transaction for £41.87 has already been posted in Accounting Period 2, a cheque drawn and reconciled – hence the bank balance on the bank statement will be £41.87 lower than the anticipated reconciled balance shown on the Reconciliation Statement that only accounts for transactions posted up to and including the Period being reconciled (i.e. excluding any transactions posted for later Periods that have already been presented to the bank and included on their statement).

This report can be produced at any time by selecting Reconciliation Statement from the Process tab and then selecting the print option – this will print the Reconciliation Statement and the Reconciled in Future Period report if there any later Period transactions that have been reconciled against the bank statement. Please note: Any transaction that has been reconciled will no longer be included in the Unreconciled Transactions report - irrespective of which Reporting Period is selected when the report is being prepared. Once you are satisfied that the Bank Reconciliation(s) are correct exit this screen and process the Period End (see Section 13).

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APPENDIX A

Multi Academy Trusts – VAT Reimbursements Allocation to Affiliated Schools

Introduction In a Multi-Academy trust each member school will record its own VAT reclaim within their individual accounts. At the end of each relevant period the Main Trust School will collate all these amounts and submit one central VAT reclaim to HMRC. HMRC will in turn reimburse the total amount claimed back to the Main Trust School and they will then need to redistribute the claimed amounts back to each member school for inclusion in their accounts. The following paragraphs detail how this should be achieved within Academy Star. Making the claim Let us assume that we have a Multi-Academy Trust that comprises five schools – one is the Main Trust school (i.e. the registered head office of the Trust responsible for submitting VAT claims to the HMRC) with the other four being the affiliated or member schools. We shall call the Main Trust School the “MT School” and the four affiliated or member schools “School 1”, “School 2”, “School 3” and “School 4” respectively. A Supplier Record will need to be set up for each of these schools too – the names set up on the Supplier records MUST MATCH EXACTLY the School Names entered in the affiliated schools’ column:

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During a given period each school records transactions that in this example lead to the following amounts of VAT that will need to be reclaimed from HMRC at the end of that period:

MT School: £15,000

School 1: £10,000

School 2: £ 8,000

School 3: £ 11,000

School 4: £ 6,000

At the end of this period each school will run its period end within STAR and as a result a VAT reimbursement amount due will appear on the VAT screen that is available from the Bank Reconciliation screen:

- for example, this is what would appear on the MAT School’s VAT reimbursement screen:

The MT School will then collate all the schools’ VAT reclaim amounts and submit the total £50,000 reclaim to HMRC on behalf of all the schools within the MAT. Receiving the Reimbursement Having received the claim for £50,000 HMRC will make a payment to the MT School of the £50,000 when the claim has been approved. As the £50,000 reimbursement has been paid directly to the MT School it now needs to record in its accounts the receipt of the £50,000 and at the same time the redistribution to the individual member schools of the amounts claimed by each school. The following paragraphs will detail the steps necessary to achieve this.

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Access the VAT screen from the Bank Reconciliation screen – it will only be showing the £15,000 that is due to the MT School (“Total for Trust”) - the “Reimbursement Total” field will be updated once the VAT Reimbursements for the affiliated schools have been recorded (see following paragraphs) but for the moment it will only show the Trust School’s VAT reimbursement amount. Tick the “Rec’d” box, enter the date the £50,000 was received and select “Create Transaction”:

The following message will be displayed:

If for some reason there had been no VAT reclaimed by the affiliated schools then at this point you would enter Yes and you would be returned to the screen shown above where you would select “Create Transaction” again to continue with the posting exercise (see below for more detail). However in this example we do have some VAT reimbursements to allocate to our four affiliated schools and so we would select “No” – the following screen will be displayed:

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Note that the Reimbursement total is still showing as £15,000 as this is all that has been allocated/recorded so far. An entry should be now be made for each school (all affiliated school location codes will be available from the drop down list in the school column). In this example we would complete the fields as follows:

School 1 = £10,000

School 2 = £8,000

School 3 = £11,000

School 4 = £6,000

As you can see having entered all the amounts that are due to be reimbursed to the individual schools the Reimbursement Total is now showing as £50,000 – i.e. the total amount that was paid to the MT School in settlement of the total VAT claim.

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Note that if Cheque Printing is turned on there is a box that can be ticked to allow you to enter your cheque details on this screen instead of waiting to add them on the Cheque Run screen if you intend to pay the schools by cheque. If you tick the Enter Cheque Details box then the Cheque No and Date fields will be included automatically on the screen for you to complete. As you select a School location from the drop down list the Description will be populated automatically. When each Affiliated school was added on the Trust School’s School Details screen you should have created matching Supplier records (with exactly the same names) – these will now be available in the drop down list for each field in the Supplier column – all you have to do is to allocate the correct school as Supplier to each reimbursement line:

As you select the Supplier name from the drop down list you will be asked whether you want to use the next available cheque number which will be populated automatically together with today’s date if you select Yes:

If Cheque Printing is switched off the Cheque fields will be shown by default. You can leave them blank and complete the payment details later on the Cheque Run. If you wish to return later without saving any data entered then select “Exit without Saving”, but if you wish to continue and post these entries to your accounts select “Save and Exit”. If you have not completed all the “Supplier” fields when you “Save and Exit” then the following message will be displayed:

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If you have chosen to proceed with the process and all fields are correctly completed then when you select “Save and Exit you will be returned to the Record of VAT Claims screen. Click and the following message will be displayed:

If this amount is correct we can select “Yes” or select “No” to return and amend any details. If you “Exit without Saving” you will lose any data you have entered. If the amount is correct and you have selected ‘Yes’ the following postings will be made to the following VAT control codes: E8320 – Income receipt of £15,000 E8330 – Income receipt of £35,000 and Expenditure transactions of £10,000, £8,000, £11,000 and £6,000 against each school giving a net balance of £0 on the E8330 VAT Redistribution code. On returning to the Bank Reconciliation screen you will see these entries reflected as follows:

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All the MT School has to do now is to make the actual payments to the member schools – in this case they have been made by cheque. The £50,000 HMRC payment has already appeared on the MT School’s bank statement and so the £15,000 and £35,000 income transactions can be reconciled once this process is complete. The £10,000, £8,000, £11,000 and £6,000 payment transactions can be reconciled as normal when they appear on the MT School’s bank statements. As each of the Schools 1 to 4 receive their VAT reimbursement from the MT School – i.e. when the amounts appear in their bank statements – they will need to record the receipt of the reimbursements as normal – i.e. by selecting the VAT screen from their Bank Reconciliation screens and creating a transaction to reflect the receipt of the reimbursement due that has been recorded there since they carried out their period end. Bank reconciliation for these receipts can then be made as normal. Once all these transactions have taken place all of the schools will have an E8320 nominal code updated to show receipt of their own individual VAT reimbursements due and the MT School will have a nominal code of E8330 that balances to zero (£35,000 - £10,000 - £8,000 - £11,000 - £6,000 = £0).

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The Bank Reconciliation Screen

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