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Wave Accounting Bank Reconciliation Tutorial 2019

tutorial wave accounting Apr 02, 2019

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Bank reconciliation is one of the most important step in closing your monthly and annual accounts. If it’s done right, it will only take you minutes or at most an hour to complete it.

Today I’m going to show you how to do bank reconciliation in Wave accounting with the right way. 

Hi, I’m Sharon and this is Nuts Accounting.

My passion is helping Online Entrepreneurs to master Cloud Accounting System in simple English.

On this blog, there’s weekly tips & tutorials on Cloud Accounting System & online business curated just for you.

 


 

Back in the days when I first started working in a prestigious accounting firm, I was assigned to do bank reconciliation.

I still remember there was almost a hundred transactions in the bank statement and it was around 15-20 pages long. I felt sooo overwhelmed and I don’t know where to start.

Once I thought I have checked through all the transactions but when I look at the reconciled balance, it does not match the balance on my bank statement. I have no choice but to undo the reconciliation and redo the whole thing from the start. I have wasted hours of work by resetting the whole thing.

 

To make the long story short, it took me 8 hours to complete it.

Fast forward to now, I got way much better and I consistently complete my bank reconciliation in 1 hour or less.

I don’t want you to make the same mistakes as I did and waste your precious time which you can use to do something that you love. So don’t worry, I will guide you with steps so you may also complete your bank reconciliation in less than one hour.

  


Step 1: Preparation

Prepare the things that you need before you start:

  • Bank statement
  • Ensure all bank transactions are recorded

 

Step 2: Wave Accounting Bank Reconciliation Page

Login to your Wave Accounting. At the left menu bar, click Accounting > Reconciliation.

When the Bank Reconciliation Page has load, select your desired bank account at the top right of the page.

 

Tip: last reconciled balance = Opening balance in bank statement

Before you start, ensure the opening balance of your bank statement is the same as your last Reconciled Balance for a good start.

In my example, I am reconciling Feb 2019. Before I start, I will check my bank statement's opening balance against my last Reconciled Balance, which is Jan 2019.

 

Step 3: Fill in closing balance of your bank statement & ending balance date

In Bank Reconciliation Page, click the start button of the month that you wish to reconcile. 

A pop up box will appear. Fill in the closing balance of your bank statement at Ending Balance Amount field and the closing date of your bank statement at Ending Balance Date field. When you're done, click Save.

 

Shortcut: No Difference!

If the Difference is 0.00 and the status is Reconciled, congratulations! You're done!

 

  

Step 4: Reconcile differences

If the Difference is not 0.00, you will then need to reconcile the differences. Click the Reconcile button right next to it.

Once you clicked on Reconcile button, Account Transactions Report page will load. This page will lists out all transactions recorded in your bank account in Wave Accounting.

It is difficult to reconcile on this page as Wave does not has the functionality to check off reconciled transactions. Hence, we would need to export this report to CSV and perform our bank reconciliation in Microsoft Excel.

Click Export button and select CSV. Your bank transactions will be downloaded to your computer. 

If you're using Chrome like me, your file will appear at the download bar situated at the bottom of the page.

 

Step 4: Reconcile differences

Open your CSV file in Microsoft Excel. Use any of the empty column as a reconciliation box and type “y” (or any other marking that you desired) next to the transactions that you reconciled with your bank statement.

In my example, I've used column G as my reconciliation column.

 

Tip: One Master List

There's 2 lists of transactions when you do bank reconciliation:

  • Bank statement
  • Sage One transactions

It is easy to get overwhelmed and feels messy if you follow both lists at the same time. 

Use your bank statement as your master list to make things simple.

 

Step 5: Reconciled Amount = Bank statement moving balance

As we are doing our bank reconciliation in Microsoft Excel, we do not have automatically populated reconciled amount or reconciled total. We would need to create our own reconciled amount with Microsoft Excel's formula. 

Type the header of Reconciled Amount: in cell H3 (Column H row 3).

Create a formula in cell H4 (Column H row 4) that will calculate the opening balance and adding the total debits minus total credits of transactions marked as reconciled (the total amount of reconciled transactions). You may copy my formula below or you may change according to your customization.

=F7+SUMIFS(D:D,G:G,"y")-SUMIFS(E:E,G:G,"y")

 

Bank reconciliation takes up a lot of time to do because by the time you think you are done, you'll notice that the reconciled balance does not match your bank statement closing balance. You will then need to reset and redo the whole bank reconciliation from the scratch.

I have been there, done that and learnt this the hard way. 

Now I have a trick that 100% works in eliminating this problem.

This is the real trick that will help you to complete your bank reconciliation in the shortest time possible.

Ensure Reconciled Total is the same as your bank statement’s moving balance after you reconcile 1 row or 2 rows of transactions.

Yes, I agree that it sounds tedious but it will only takes you 2 seconds every time to have a look at your bank statement's moving balance. I feel 2 seconds is a very good bargain compare to hours of redo. (And it makes me feels good that I can complete bank reconciliation in a fraction of time while my peers spend hours on it 😉)

 

Step 6: Record / modify bank transactions

If you can’t find your transaction in Wave, record or modify your transaction in Wave and then manually add in at the bottom of the list in the excel file. Remember to mark it as reconciled to have the correct Reconciled Amount.

If you can’t find your transaction in bank statement, you may filter the list in your excel file to view only unreconciled transactions. Investigate further on the transactions and make the necessary amendments.

 

Step 7: Reconciled Total = Closing Balance on Bank statement

When you've checked all the transactions in your bank statement, its time to check your closing balance.

Check the Reconciled Total is the same as the closing balance of your bank statement. This should be the same as Statement Balance which you have fill in earlier.

Ensure Difference is 0.

 

So there you have it. These are the 7 easy steps to help you to do bank reconciliation in Wave Accounting in less than 1 hour. Pretty easy, right?

 


What is the next Wave Accounting tutorial that you would like to learn?


Let me know in any of the social platforms or by email!

As always, Nuts Accounting is here to help Entrepreneurs to master Cloud Accounting System in simple English. 

On this blog, there’s weekly tips & tutorials on Cloud Accounting System & online business curated just for you.

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Disclaimer: This blog post is not sponsored by any of the products mentioned in anyways at all. I created this blog post based on my personal experience and I hope that by sharing my knowledge with you, you can use yours better.

No part of the content of this video or any video published by Nuts Accounting, shall be stored, copied, recreated, republished, or transported.

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