Some might think that simply importing and allocating transactions from your bank is reconciliation but this is not the case.
Bank reconciliation is the process of cross-checking transactions in Beeswax against those at your bank. The reconciliation process is a crucial activity for every business, and it’s one of the key responsibilities of a bookkeeper.
Beeswax approaches bank reconciliation in its own unique way. Some might even say it’s a little “old school”. But it’s old school with a modern twist.
Beeswax alerts you, in a visual way, when a previously reconciled transaction is altered. There are several reasons this might be needed and, while this is rare, it does happen. If you’re the owner of the business you’ll want to know why and who altered it.
It’s often easy for something to change that can throw the accounts out without you even being aware of it. And even then it can be hard to find which transaction it was that impacted the accounts.
Beeswax addresses this by introducing a visual representation of your back account statements and their reconciled status.
Beeswax assumes that you receive regular statements from your bank, usually monthly. These statements are now often sent as electronic PDFs, but either way, the bank is legally required to provide you with a statement of some kind. You get them, so make sure to use them!
If you don't get a statement physically sent to you in the mail you can log into your online banking system and download a copy as a pdf (yes, we know, it’s old school).
Beeswax recommends working from a paper statement when reconciling your accounts. It’s just more practical to use a highlighter to check things off rather than trying to do this electronically bouncing around between screens. We know, we’ve tried it. Yes, it’s old school, but why change a perfectly good process when it works and works well? We’ll talk more about this later.
Generally, once a financial year has concluded, it is not necessary to devote significant attention to it. That's why Beeswax concentrates on the current financial year throughout most of the sections. Consequently, the Bank Reconciliation page displays the current financial year. Naturally, you can access all other financial years by clicking on the “Show All Statements” link.
Upon establishing a Beeswax account, you will be provided with two accounts: a Bank Account (Asset Account) and a Credit Card (Loan or Liability Account). Both accounts will generate Bank Statements, but you have the flexibility to adjust the dates. This allows for the generation of statements for the month in which the account was established. For instance, if your Beeswax account was created on January 14th, a statement will be generated for the entire month of January, spanning from January 1st to 31st.
Your bank accounts are created and managed within the Chart of Accounts area. It is imperative to remember that your bank account is an asset account, and its management should be conducted in the same manner as that of your other transaction accounts, such as income and expense accounts.
Consider Bank Statements in Beeswax as a snapshot of all the transactions that exist within Beeswax for a specific Bank Account over a given date range. Beeswax provides a clear visual representation of all your statements, allowing you to discern at a glance which ones have been reconciled and which have not. Moreover, you can identify any potential unreconciled transactions that may arise later. For instance, you may reconcile certain transactions in a statement, but circumstances may change over time (although this is rare). Therefore, it is beneficial to know when and where these changes occur. This is precisely where the reconciliation view in Beeswax becomes highly useful.
In the vein of Beeswax’s straightforward Red light Green light approach, Green signifies positive outcomes, while Red indicates negative ones. Consequently, when your Bank Statement is reconciled, the bar associated with that statement turns Green, indicating a successful reconciliation. Conversely, if the statement is not reconciled, the bar turns Red.
Upon initial entry of opening and closing balances, as well as the corresponding start and end dates, you will observe that the bar turns red, indicating an unreconciled statement. This indicates that the statement requires further attention and reconciliation. Once the statement is fully reconciled, the bar will turn Green, signifying a successful reconciliation.
A key advantage of this Bank Reconciliation method is its ability to provide immediate visual feedback on any discrepancies. For instance, if a payment is altered in the past, it will disrupt the accounts and cause the bar to turn Red. This alerts you to the specific statement affected by the error or change.
