Reconciling your bank is simply the process of matching your Sage transactions to those that appear on your bank statement.
A bank reconciliation flags the selected bank transactions to show you’ve checked they are correct, and records the date you checked them. You can then look back at any time to see which transactions are reconciled and which aren’t.
Complete the statement summary
On the navigation bar, click Bank accounts then select the bank account you want to reconcile.
From the toolbar, click Reconcile and complete the Statement Summary window as required.
Statement Reference
This shows the bank account reference, date and statement number. You can amend this, as required.
Ending Balance
This defaults to the current balance of the selected bank. Enter the end balance from the actual bank statement you’re about to reconcile.
Statement Date
Enter the end date of the actual bank statement you’re about to reconcile.
Interest Earned
Enter the details of any interest earned.
Account Charges
Enter the details of any account charges.
Tip: You can also edit this information once in the Bank Reconciliation window by clicking Edit.
3. Click OK.
Check your last reconciled balance
In the bank reconciliation window, check the Last reconciled balance.
This should match the opening balance on the bank statement you’re reconciling.
If it doesn’t match, to identify the reason look for the following:
A reconciled transaction has been deleted.
The bank reconciliation flag has been removed from a transaction that was reconciled.
The value of a reconciled transaction has been amended.
Additional transactions have been reconciled.
A reconciled transaction has been moved to a different bank account.
An opening balance has been posted to the bank account.
If it does match, continue to Match your transactions.
Match your transactions
In the Un-matched transactions window, find and select the first transaction that appears on your bank statement, and click Match.
The transaction appears in the Matched transactions window, check your running balance agrees with the running balance on your bank statement.
If a transaction isn’t listed in Sage Accounts, but is on your bank statement, you can enter it using the Adjust option.
Repeat steps 1 to 3 until all transactions are matched on your bank statement.
Note: If required, you can save the reconciliation at any point and complete it at a later date. To do this, click Save progress. Next time you open the Reconcile window, click Use Saved to open the previously saved reconciliation.
Reconcile your bank statement
Once complete, check the Matched Balance and the Statement Balance are the same, giving a Difference of zero.
If the Difference is zero, click Reconcile.
A progress bar appears while the software flags your transactions and creates a PDF file of your reconciled statement. The time this takes depends on the number of transactions you’re flagging.
If the Difference is not zero
End Balance – This should match the end balance on your bank statement. If it doesn’t enter the correct balance.
Last reconciled balance – This should agree with the opening balance on your bank statement and should also be the same as the matched balance from the previous period. If this is different, please refer to article 32811.
Adjustment postings – Ensure that you’ve posted any adjustments for bank charges or interest received.
Double check matched transactions:
Check for missing transactions.
Check for duplicate transactions.
Check the value of each transaction matches your bank statement.
Tip: If you prefer, temporarily you can post a transaction to correct it. To do this, use the Adjust option in the bank reconcile window to post a bank receipt or bank payment to nominal code 9998. If you’re unsure, please contact your accountant.
The Debtors and Creditors Control Accounts are two of the most important accounts on the nominal ledger, as they represent money owed to you by your customers and money owed by you to your suppliers. Therefore, most companies reconcile these accounts on a monthly or yearly basis.
How the Debtors and Creditors Control Accounts are updated
Debtors Control Account
Transaction type
Effect on control account
SI
The total value including VAT is automatically debited to this account, increasing the balance.
SR or SA
The total value is automatically credited to this account, decreasing the balance.
SC
The total value, including VAT, is automatically credited to this account, decreasing the balance.
SP
The total value, including VAT, is automatically debited to this account, increasing the balance.
Therefore, the balance on the Debtors Control Account, is the total amount that your customers currently owe you and should always agree with the total balance outstanding on your Customers ledger.
Creditors Control Account
PI
The total value including VAT, is automatically credited to this account, increasing the balance.
PP or PA
The total value is automatically debited to this account, decreasing the balance.
PC
The total value including VAT, is automatically debited to this account, decreasing the balance.
PR
The total value including VAT is automatically credited to this account, increasing the balance.
Therefore, the balance on the Creditors Control Account, is the total amount that you currently owe your suppliers and should always agree with the total balance outstanding on your Suppliers ledger.
To reconcile the Debtors Control Account on a monthly basis
Note: Before running any of the customers reports mentioned in this article, you should ensure that there’s no searches applied.
You can follow this process at the end of any period dictated by your business, for example, you may only need to do this at the end of a year. If you want to reconcile the Debtors Control Account on a yearly basis, you should run this procedure but check the annual trial balance figures and run the day book reports for the financial year, rather than a month.
Note: In this example, all transactions for the month of May have been posted, you’re reconciling the Debtors Control Account for May, and the previously reconciled month was April.
Check the following balances:
Last month’s Debtors Control Account balance – To find or check this figure, you should print out the trial balance report for the previously reconciled month, for example, print the trial balance report for April.
The monthly movement on the Debtors Control Account – To find or check this figure you should print the Trial Balance report for the month you’re reconciling, then deduct the Debtors Control Account balance for the previous month, from the Debtors Control Account balance on this Trial Balance report. For example, deduct the April Debtors Control Account balance from the May Debtors Control Account balance.
The totals on each of the customer day books reports for the month you’re reconciling. To do this, run each of the following day book reports, using the date range for the month you’re reconciling:
Report
Report location
Day Books: Customer Invoices (Summary)
Customers > Reports > Day books.
Day Books: Customer Credits (Summary)
Customers > Reports > Day books.
Day Books: Customer Discounts (Summary)
Customers > Reports > Day books.
Day Books: Customer Receipts (Summary)
Bank accounts > Reports > Customer receipts and payments.
Sage Accounts 2014 (v20) and below – Bank > Reports > Customer receipts and payments.
Customer Refunds
Customers > Reports > Customer activity.
To check the monthly movement on the Debtors Control Account, use the following formula:
Day Books: Customer Invoices – Total Gross Amount
Minus
Day Books: Customer Credits – Total Gross Amount
Minus
Day Books: Customer Receipts – Total Gross Amount
Minus
Day Books: Customer Discounts – Total Gross Amount
Plus
Customer Refunds – Total Gross Amount
This balance should equal the balance of the Debtors Control Account at the end of the month you’re reconciling. For example, the balance on the Debtors Control Account from the May Trial Balance report.
To reconcile the Debtors Control Account with the Customers ledger use this formula:
The previous months balance on the Debtors Control Account from the Trial Balance report
Plus
Day Books: Customer Invoices – Total Gross Amount
Minus
Day Books: Customer Credits – Total Gross Amount
Minus
Day Books: Customer Receipts – Total Gross Amount
Minus
Day Books: Customer Discounts – Total Gross Amount
Plus
Customer Refunds – Total Gross Amount
This balance should equal the balance of the Creditors Control Account at the end of the month you’re reconciling. For example, the balance on the Creditors Control Account from the May Trial Balance report.
To check that the Debtors Control Account balance matches the Aged Debtors balance at the month end
Note: To check that the creditors Control Account balance matches the Aged creditors balance at the year end, you should run this procedure using the annual Trial Balance report figures and running the Aged creditors Analysis report to the end of the financial year, rather than to the end of the month.
Check the Creditors Control Account balance at the month end, by running the Trial Balance report for the required month.Nominal ledger > Trial balance.Sage Accounts 2014 (v20) and below – Modules > Financials > Trial Balance. or Sage Accounts 2014 (v20) and below – Modules > Financials > Trial Balance.
Print or preview the Aged Creditors Analysis (Detailed) report from, Suppliers > Reports > Aged creditors.When running this report, you should ensure that you use a transaction date range from 01/01/1980 to the end of the month being reconciled and select the Exc Later Payments check box.Note: When running this report, you should ensure that there’s not a searches applied to the suppliers module.
Make a note of the balance from the Grand Totals line of the report.
Compare the Creditors Control Account balance to the balance from the Aged Creditors Analysis (Detailed) report. They should be the same.If there’s a difference between the two balances, check the Creditors Control Account activity for any transactions that aren’t supplier transactions, for example, journals. Any journals posted to the Creditors Control Account don’t affect the suppliers ledger and therefore cause a discrepancy between the two balances. If these journals are incorrect you should reverse them and then repost them correctly.
To reconcile the Creditors Control Account on a monthly basis
You can follow this process at the end of any period dictated by your business, for example, you may only need to do this at the end of a year. If you want to reconcile the Creditors Control Account on a yearly basis, you should run this procedure but check the annual trial balance figures and run the day book reports for the financial year, rather than a month.
Note: In this example, all transactions for the month of May have been posted, you’re reconciling the Creditors Control Account for May, and the previously reconciled month was April.
Check the following balances:
Last month’s Creditors Control Account balance – To find or check this figure, you should print out the Trial Balance report for the previously reconciled month, for example, print the trial balance report for April.
The monthly movement on the Creditors Control Account – To find or check this figure you should print the Trial Balance report for the month you’re reconciling, then deduct the Creditors Control Account balance for the previous month, from the Creditors Control Account balance on this Trial Balance report. For example, deduct the April Creditors Control Account balance from the May Creditors Control Account balance.
The totals on each of the supplier day books reports for the month you’re reconciling. To do this, run each of the following day book reports, using the date range for the month you’re reconciling:
Report
Report location
Day Books: Supplier Invoices (Summary)
Suppliers > Reports > Day books.
Day Books: Supplier Credits (Summary)
Suppliers > Reports > Day books.
Day Books: Supplier Discounts (Summary)
Suppliers > Reports > Day books.
Day Books: Supplier Payments (Summary)
Bank accounts > Reports > Supplier payments and receipts.
Sage Accounts 2014 (v20) and below – Bank > Reports > Supplier payments and receipts.
Supplier Refunds
Suppliers > Reports > Supplier activity.
To check the monthly movement on the Creditors Control Account, use the following formula:
Day Books: Supplier Invoices – Total Gross Amount
Minus
Day Books: Supplier Credits – Total Gross Amount
Minus
Day Books: Supplier Payments – Total Gross Amount
Minus
Day Books: Supplier Discounts – Total Gross Amount
Plus
Supplier Refunds – Total Gross Amount
This balance should then equal the monthly movement on the Creditors Control Account.
To reconcile the Creditors Control Account with the Suppliers ledger use this formula:
The previous months balance on the Creditors Control Account from the Trial Balance report
Plus
Day Books: Supplier Invoices – Total Gross Amount
Minus
Day Books: Supplier Credits – Total Gross Amount
Minus
Day Books: Supplier Payments – Total Gross Amount
Minus
Day Books: Supplier Discounts – Total Gross Amount
Plus
Supplier Refunds – Total Gross Amount
This balance should equal the balance of the Creditors Control Account at the end of the month you’re reconciling. For example, the balance on the Creditors Control Account from the May Trial Balance report.
To check that the creditors Control Account balance matches the Aged creditors balance at the month end
Check the Creditors Control Account balance at the month end, by running the Trial Balance report for the required month.
Nominal ledger > Trial balance.Sage Accounts 2014 (v20) and below – Modules > Financials > Trial Balance.
Print or preview the Aged Creditors Analysis (Detailed) report from, Suppliers > Reports > Aged creditors.When running this report, you should ensure that you use a transaction date range from 01/01/1980 to the end of the month being reconciled and select the Exc Later Payments check box.Note: When running this report, you should ensure that there’s not a searches applied to the suppliers module.
Make a note of the balance from the Grand Totals line of the report.
Compare the Creditors Control Account balance to the balance from the Aged Creditors Analysis (Detailed) report. They should be the same.If there’s a difference between the two balances, check the Creditors Control Account activity for any transactions that aren’t supplier transactions, for example, journals. Any journals posted to the Creditors Control Account don’t affect the suppliers ledger and therefore cause a discrepancy between the two balances. If these journals are incorrect you should reverse them and then repost them correctly.
Many businesses trade in different currencies. In Sage Accounts, the Foreign Trader option makes this easy.
The option is available as standard in Sage 50 Accounts Professional and Client Manager. In other variants of Sage 50 Accounts and Sage Instant Accounts 2014 (v20) and above, Foreign Trader is available as an add-on.
How to activate foreign trader
Before you can start using Foreign Trader, you have to activate it in your software:
To activate Foreign Trader in Sage Accounts 2014 (v20) and above
Tools > Activation > Enable Foreign Trader.
Sage Accounts Plus and below – you maybe prompted to enter your Foreign Trader serial number and activation key.
OK > Next.
Revaluation N/C box > enter a nominal code for the revaluation control account.
This is the nominal code to be used by Sage 50 Accounts for the automatic revaluation postings that correct any fluctuations caused by exchange rate differences when processing foreign currency transactions. If you’re using the Sage default nominal structure, by default this is nominal code 7906 – Exchange Rate Variance. If you’re already using this nominal code and there are transactions associated with it, this box is left blank for you to enter an alternative nominal code. This nominal code can be changed from Settings > Control Accounts.
Update method drop-down list > choose how the currency records update when you enter an exchange rate for a transaction from one of the options below.
Always Prompt to save exchange rate changes
When you enter an exchange rate, this option prompts you to save the exchange rate to the currency record.
Automatically save any exchange rate changes to currency record
When you enter an exchange rate, this option automatically saves the exchange rate to the currency record, without warning.
Never save any exchange rate changes
When you enter an exchange rate, this option doesn’t save the exchange rate to the currency record. If you select this option and want to update your exchange rates, they must be entered manually in Settings and then Currencies.
You can change this after you complete the Foreign Trader Setup wizard from Settings > Invoice & Order Defaults > General tab > select the Currency Exchange Rates drop-down list > choose which method you want to use.
