Chapter 8 Banking
(3295)
This Chapter covers changes to Banking in Big Business 2.5 and recent additions to Big Business Documentation including:
• Changes to Banking Features
• Adjusting a Bank Account Balance
• Bank Reconciliation Procedure
• Saving a Reconciliation in Progress
• Changing Reconciliation Beginning Balance
Chapter 8 Info Center
(3311)
This Chapter covers changes to the Info Center in Big Business 2.5 and recent additions to Big Business Documentation including:
• Batch Delete of Contacts
• Printing Custom Forms and Reports
• Creating Custom Forms
• Adding Phone Numbers
Chapter 6 Banking
(3647)
This Chapter covers Banking in Big Business and recent additions to Big Business Documentation including:
• Changes to Banking Features
• Adjusting a Bank Account Balance
• Bank Reconciliation Procedure
• Saving a Reconciliation in Progress
• Changing Reconciliation Beginning Balance
Creating a General Journal Entry for a Bank Account
This is a duplicate record listed under "Bookkeeper." The original is under "Banking" as this procedure is properly performed from the Banking toolbar.
Big Business does not allow a Journal Entry (from the Journal tool on the Bookkeeper toolbar) to a Bank Account because it would create an entry the would not show up on a Reconciliation. (3007, 30721)
Big Business does not allow a Journal Entry (using the General Journal tool on the Bookkeeper toolbar) to a Bank Account because it would create an entry that would not show up on a Bank Reconciliation.
Use the Balance Adjustment tool on the Banking toolbar. Think of the Balance Adjustment a General Journal entry between a Bank Account and a Category. Use the Balance Adjustment to record adjustments to your Bank Accounts, including service charges and corrections.
When using the Balance Adjustment tool, keep the following in mind:
• Balance Adjustments are permanent. You cannot Void or Delete a saved Balance Adjustment. To correct an error, you must enter another Balance Adjustment.
• Balance Adjustments allow you to select only one offset Category. For payouts with splits, use a Misc. Check or Make a Payment to Other.
• When using a Balance Adjustment in conjunction with a General Journal entry, you may want to create a clearing account for use on the General Journal entry, then use the Balance Adjustment to affect the Bank Account, using the clearing account as the offset.
To enter a Balance Adjustment:
1. Select the Balance Adjustment tool. Enter the Reference Number, Date, and Bank Account, as appropriate.
2. Enter either a New Balance for the account, or the amount of the adjustment.
3. Specify an offset Category, using the Category QuickPop.
4. Click the OK Button to Save the Balance Adjustment.
Changes to the Banking Features
(3273)
Big Business 2.5 adds several changes to the Bank Reconciliation tool
• Updated procedure for Bank Reconciliations
• Ability to Change Beginning Balance on Bank Reconciliations
• Option to Save a Reconciliation in progress without an Adjusting Entry
Setting Up Credit Card and Loan Accounts
Big Business identifies the following types of Bank Accounts:
Cash
Checking
Credit Card
Loan
Savings
When creating a new Bank Account, do so only in the Bank Card tool. Setting the Bank Account Type determines the way in which Big Business will maintain the account. By using the “Credit Card” or “Loan” Bank Account Type you create an account whose balance increases when it is used for payment (recorded as a Current Liability). This Solution provides tips for dealing with Credit Card and Loan Accounts. (3160)
A Credit Card or Loan Account can be used from the Make A Payment tool in exactly the same way that any cash account is used.
On the History tab of the Bank Card for the account, clicking the plus key will present with a list of special transactions for this account (above). Pay Credit Card Bill is simply a Transfer from another cash account. If you have included the Payee Name and Address in the Mailing Address field of the Bank Card, you can print a check from the Transfer transaction. To save entering a reference (i.e. credit card account number) include add this to the Mailing Address field for the Account to have it appear on the check, or enter it in the Comments (check memo) for each payment.
When Reconciling a Credit Card or Loan account, notice that the field for entering Bank Fees for a regular cash account, changes to Fin. Charges. Amounts entered here are automatically posted to the Finance Charge Category specified in the Vendor Prefs Card, not the Bank Fees Categories that other bank accounts use.
Handing Your Credit Account(s)
The Banking tools in Big Business include several features to accommodate credit card accounts (3507)
Big Business includes a complete set of tools for handling company credit card accounts.
Adjusting a Bank Account Balance
Big Business does not allow a Journal Entry (from the Journal tool on the Bookkeeper toolbar) to a Bank Account because it would create an entry the would not show up on a Reconciliation. To post to a cash account (set up as a Bank Account in Big Business) use the Balance Adjustment bank transaction (3006, 30721)
Big Business does not allow you to post directly to Bank Accounts using the General Journal tool. In order to create a bank transaction which can be reconciled, you must use a Balance Adjustment in lieu of a General Journal entry between a Bank Account and a Category. Use a Transfer in lieu of a General Journal entry between two Bank Accounts.
To adjust a Bank Account balance:
1. Open the Bank Account Card
2. Go to the History tab
3. Click the plus button ("+") in the upper right hand corner of the Transaction list
4. Select Balance Adjustment if you want to post to a non-bank Card. Select Transfer... if you want to post to another Bank Card.
5. Enter a Reference, Date, Amount, and Account or Category as appropriate and save the Transaction.
6. Close the Bank Card.
NOTE: The Bank Card will not update until it has been closed. If you are making an entry for reconciliation purposes, it will not be available unless you close and reopen the Bank Card and the reconciliation in progress.
Balance Adjustment Tool
This Solution describes correct usage of the Balance Adjustment tool to adjust Bank Card balances (instead of making a Journal Entry to the Bank Account--not allowed). The Balance Adjustment tool is now located on the Banking toolbar for your convenience. (3516)
Big Business 2.6 adds the Balance Adjustment tool on the Banking toolbar. Think of the Balance Adjustment a General Journal entry between a Bank Account and a Category. Use the Balance Adjustment to record adjustments to your Bank Accounts, including service charges and corrections.
When using the Balance Adjustment tool, keep the following in mind:
• Balance Adjustments are permanent. You cannot Void or Delete a saved Balance Adjustment. To correct an error, you must enter another Balance Adjustment.
• Balance Adjustments allow you to select only one offset Category. For payouts with splits, use a Misc. Check or Make a Payment to Other.
• When using a Balance Adjustment in conjunction with a General Journal entry, you may want to create a clearing account for use on the General Journal entry, then use the Balance Adjustment to affect the Bank Account, using the clearing account as the offset.
To enter a Balance Adjustment:
1. Select the Balance Adjustment tool. Enter the Reference Number, Date, and Bank Account, as appropriate.
2. Enter either a New Balance for the account, or the amount of the adjustment.
3. Specify an offset Category, using the Category QuickPop.
4. Click the OK Button to Save the Balance Adjustment.
Bank Reconciliation Procedure
This Solution provides instructions for using new features in the Bank Reconciliation. (3294)
Big Business 2.5 improves several of the options in a Bank Reconciliation. The procedures which follow include new functionality, new options for saving an in-progress reconciliation to add transactions, and overriding the default Beginning Balance for a new reconciliation.
To create a new Bank Reconciliation:
1. From the Banking toolbar, select the Bank Reconciliation tool.
2. Enter the desired date, and select the Bank Account to be reconciled.
The first Bank Reconciliation for an Account will prompt you for a Beginning Balance, which should be zero. Subsequent reconciliations use the ending balance of the previous reconciliation as their beginning balance. To override this default, hold down the Command Key Set (Shift-Control-Alt on the PC, Shift-Option-Command on the Mac) while selecting the Account to reconcile.
3. Enter any Bank Fees, Interest Earned, and the Ending Balance.
4. Click once on each cleared transaction, or using the Selection tool in the upper left corner choose: Select All, Select Through Date, or Deselect All.
Your Bank Reconciliation is complete when the calculated Difference is zero.
5. Click the OK button to save.
Saving a Reconciliation In Progress
This Solution outlines the procedure for saving a Bank Reconciliation in progress (that is partially completed) so that missing transactions can be entered. (3275)
If you discover missing entries as you are reconciling an account, one option is to allow Big Business to make a correcting entry when you save the reconciliation. This is useful for correcting minor discrepancies when you know your statement Ending Balance to be correct. The correction is posted to the Default Other Expense Category specified in Banking Prefs
Big Business 2.5 adds the option save the reconciliation without a correcting entry, so that you can save the reconciliation in-progress and enter any missing transactions.
To save a reconciliation in-progress:
1. Click the OK button.
2. From the choices of Create Entry, Don't Create Entry, and Cancel (pictured), select Don't Create Entry.
3. Create additional transactions.
4. Open the Bank Card
5. Open your in-progress reconciliation from the list of Reconciliations.
6. Complete the reconciliation so that the Difference is zero.
Changing Reconciliation Beginning Balance
This Solution describes the process for changing the Beginning Balance on a new Bank Reconciliation. This feature is useful for:
• Resolving a discrepancy between the cumulative Reconciliation Ending Balance and the actual Balance of the Bank Account.
• Creating Bank Reconciliations out of sequence
• Accommodating Reconciled transactions which have been Duplicated (3274)
Big Business 2.5 adds the ability to change the beginning balance used on a Bank Reconciliation. Previous versions of Big Business prompt you for a beginning balance only when creating the first reconciliation for a given account. Subsequent reconciliations forced you to use the ending balance of the previous reconciliation as a beginning balance.
Big Business 2.5 allows you to override this default by holding down the Command Key Set (Shift-Control-Alt on the PC, Shift-Option-Command on the Mac) while selecting the account to be reconciled.
You might want to enter the beginning balance rather than use the ending balance of the previous reconciliation if, for example, you are creating a bank reconciliation out of sequence.
To enter the beginning balance on a new Bank Reconciliation:
1. Open the Bank Reconciliation tool
2. Hold down the Command Key Set (Shift-Control-Alt on the PC, Shift-Option-Command on the Mac) while selecting the Account to be reconciled.
3. Enter the desired Beginning Balance and click the OK button.
Bank Reconciliation Procedure
The Big Business Bank Reconciliation feature is versatile and user-friendly provided you know what you're doing. This solution teaches you how to:
-Reconcile a Bank Account in Big Business.
-Save a reconciliation in progress, so that you can enter missing transactions and return to complete your reconciliation.
-Verify that your reconciliation is complete.
(3005, 30707)
Before proceeding with a reconciliation, open the last reconciliation posted and verify that it balanced (e.g. Difference is zero). NOTE: Creating a new reconciliation locks the previous reconciliation. If you later discover a reconciliation that didn't balance, you will need to delete all subsequent reconciliations in order to fix it.
Open the Reconciliation tool from the Banking Toolbar. If this is your first reconciliation you will prompted for a Beginning Balance, which should be zero. Subsequent reconciliations use the last ending balance as their beginning balance.
Enter the Ending Balance and Bank Fees or Interest from your bank statement and begin selecting the items that your statement lists as having cleared.
Use the Transaction button in the upper left corner of the transaction list to open a selected item for review or modification.
If you need to exit an incomplete Reconciliation at any time (to enter a missing check, for example) you can save your work in progress by clicking the OK Button and opting to Create an Entry. You can later return and complete the Reconciliation.
NOTE: Close the Bank Card whenever you save a reconciliation so that it will update with your new reconciliation. A common mistake is to save the reconciliation and not close the Bank Card, then accidentally open the previous reconciliation because it is last in the list (which hasn't been updated because the Bank Card is open).
A reconciliation is complete when it balances (e.g. Difference is equal to zero). If this requires a Balance Adjustment see the Solution for making a Balance Adjustment to a Bank Account.
Q&A: What is the Clear Band Area on Checks?
Financial institutions (i.e. banks) process your checks by scanning the account information from the bottom of the check (so called MICR printing, now read by Optical Character Recognition). This saves them oodles of time.
If other information printed on the check (e.g. a comment/memo, not a wild signature) encroaches on the bottom (5/8") area, the check may need to be processed manually (and the bank may levy a charge for processing your checks).
Hence, the bottom 5/8" of the check is referred to as the Clear Band Area. (3556)
Big Business is designed for use with Deluxe check #81013. Forms Info is available on the Print Options list from any Big Business transaction (e.g. a Quote). Substitute checks should be examined carefully for fit.
Bank Transfer Shows In Use
The Status of a Bank Transaction affects your ability to modify the transaction. For example, a Check with the Status, "Printed," cannot be modified or deleted, and may only be Voided--to preserve an audit trail.
When a Transfer is Reconciled from either Bank Account it is marked In Use. To modify a Transfer it may not be reconciled in either Bank Account. (3417)
Bank Transfers are transfers between two Bank Accounts in Big Business. For example:
To Pay a Credit Card from Checking:
1. Open the Bank Card for the credit card
2. Go to the History Tab
3. Add a transaction (click the plus button)
4. Select, "Pay Credit Card Bill."
5. Enter the amount to pay (or paid), and click print if you need to print a check.
Think of a Transfer between Bank Accounts as two bank transactions. If you use the Bank Transaction QuickSearch to locate a Transfer--by Reference number, Date, or Amount--you will find two "halves" of the transaction, with the Status of each listed.
If a Transfer is Reconciled, from either affected Bank Account, the Transfer will be marked "In Use" and cannot be modified unless the Reconciliation is modified or deleted.