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Bank Reconciliation - Troubleshooting a Difference/Variance amount

  • Updated

It is recommended that you reconcile your transactions daily, so you are always aware of any differences/variances in the balances as they occur.

A difference/variance is the result of a discrepancy between transactions in your Trust account and in Vault. It is necessary that you check your transactions & determine the transaction/s causing the difference/variance.

This article gives you some troubleshooting solutions should you find your trust account not balancing in Vault.

Contents:

Step by step

Getting Started

Before you can start investigating this balance issue you will require:

1. Bank statement showing all transactions since the date you last balanced & the closing balance for the day you are reconciling to.

2. Check the bank statement pages numbers are in sequential order to ensure you have ALL pages

3. Check the bank statement closing balance is the same as what is in Vault for the date you are reconciling to

4. Print/View Cash Book (Payments) for the period you are reconciling

 In Vault, go to Financials > Trust Reports > Cash Book (Payments) > filter using the date range required to view transactions entered into Vault for the same period > Refresh

5. Print/View Cash Book (Receipts) for the period you are reconciling

In Vault, go to Financials > Trust Reports > Cash Book (Receipts) > filter using the date range required to view transactions entered into Vault for the same period and view All Receipts Types > Refresh

Important to Remember

  • Never reconcile a transaction in Vault unless it appears on your bank statement
  • Transactions will only appear in Vaults Trust Reconciliation on the date you are reconciling to
  • Reversals of a receipt or payment will be dated the day you reverse them, which means they will only appear in Vaults Trust Reconciliation when you are reconciling to that date

Example: Owner Payment of $400 was made on 15th March & was reversed on the 16th March. If you are reconciling to the 15th March you will not see the reversal until you reconcile to the 16th March

  • A +/- Journal (adjustment within your trust reconciliation) is used to falsely balance your bank reconciliation until you fix the transaction causing the difference/variance
  • It is important to tick/reconcile the journal (adjustment) once it has been accounted for correctly in Vault
  • Any unknown credits on the bank statement should be receipted to the Unknown/Unidentified Ledger until they are identified and allocated as required

Link: Receipting - Unidentified Monies

Tips to assist when looking for a Difference/Variance

  • If you haven't reconciled for a while, go back to the last date you were reconciled, then complete a reconciliation for every day to bring you up to the current date
  • Check you are reconciling to the correct date and using the correct bank statement balance for that date
  • Ensure any +/- Journals (adjustments) in the bank reconciliation have been properly entered and the correct double entry journal is remaining eg. debit or credit 
  • Print off your bank statements and cash book payments and receipts reports and manually cross check to ensure all transactions are correct
  • If using the Auto Tenant Receipting feature, ensure you haven't imported an incorrect file into Vault
  • Check the correct payment & Bpay files have been uploaded to your bank
  • If using the Direct Debit feature, there is a 2 day clearance period and a +/- Journal (adjustment) is automatically created. Only tick/reconcile the journal/adjustment once the funds have cleared

Positive & Negative Differences

Negative Difference (showing a minus -)

This indicates that Vault has more money than your trust account. 

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Examples why this may occur:

  • A rent receipt has been receipted twice and reconciled - compare your bank statement against the Cash Book (Receipts) report to identify the duplicate receipt
  • A data entry error has occurred and figures have been transposed eg: $580.00 was entered as $850.00
  • A payment has been made from your trust account and the transaction has not been processed in Vault - compare your bank statement against the Cash Book (Payments) report to identify payments not entered in Vault

Positive Difference

This indicates that Vault has less money than your trust account.

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Examples why this may occur:

  • A credit transaction on your trust account hasn't been receipted into Vault, such as rent received from the tenant or it was receipted using an incorrect date
  • An owner payment that has been returned to your trust account due to incorrect bank details
  • A payment has been made from Vault but not from your trust account
  • Check you have ticked/reconciled any adjustments if the transaction has been rectified

Journals/Adjustments

Adjustments should only be entered when a transaction cannot be rectified immediately. Adjustments should be rectified as soon as possible.

If a journal/adjustment is required remember to tick/reconcile the same type (credit/debit) of transaction on the statement.

If the transaction is a deposit/credit on your bank statement, you would tick/reconcile the credit journal. Tick the withdraw/debit journal once the error has been resolved.

If the transaction is a withdraw/debit on your bank statement, you would tick/reconcile the debit journal. Tick the deposit/credit journal once the error has been resolved

Need further assistance?

If you have read and worked through the above and are still unable to find & correct the difference/variance, we recommend that you engage with a bookkeeper to investigate this for you.

We can provide assistance in correcting the required transactions once you have identified the discrepancies. The Vault support team cannot assist you with doing your bank reconciliation or troubleshooting your bank reconciliation.

 

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