Banking Routines

• Sales Ledger Debtors Control Account must agree with Aged Debtor Listing
• Purchase Ledger Creditor Control Account must agree with Aged Creditor Listing
• The Bank nominal code should be reconciled with the Bank Statement
• Stock Nominal should agree to actual stocks (requires physical stock take)

• Click on SALES  
• Click on POSTINGS
• Click RECEIPTS

The screen opposite shows a highlighted invoice, which matches the payment and defaults to the amount previously entered.

Select OK and confirm through to exit including method of payment. 

The program stores details of each posting, to be printed later in the form of a “daybook”, which also shows the balance brought forward, the total values posted this run and the closing carried forward balance.

The program allocates a “run number” which is printed as part of the headings of the daybook and entered on the postings record as well as the records paid. Each posting is also allocated a posting reference number as it is made. The “run number” and the “posting reference” are invaluable when searching through “nominal enquiries” for specific transaction listings or as an aid to correct errors.

The program expects you to match payments made to the invoices to which they relate. You can allocate less than the full amount to an invoice but the difference is treated as settlement discount. ?? can now part payThere is no facility to “part pay” an invoice, but you can post cash as ‘unallocated’ (Un-Cash is the reference  used on sales ledger) i.e. not to any specific invoice. This cash must eventually be allocated to an invoice or number of invoices at a later date (e.g. when the rest of the cash is received, or when a credit note is raised for the difference).  Similarly if the value of the invoices allocated exceeds the value received, the system will post a ‘reverse payment’ (Rev.Pmt.) transaction if ‘Yes’ is answered to the warning message displayed.  This “underpayment” should eventually be cleared during another receipt posting.

You may also post negative receipts, when you will be prompted to identify whether this is a refund or a contra with another Sales Ledger Account, and also the method of payment.  This can be useful for bounced cheques.

So once the cash is posted to the sales ledger account you have credited the debtors account and debited Cash in Hand. Hence this account lists all the cash received whether by Cash receipt for a cash sale at time of sale, or cash/cheque receipt for a credit invoice where time to pay has been agreed in advance.

Now that the Banking has been done, you will have a copy of the Banking slip or a cash received manual ledger identifying the invoices paid or reasons for the cash receipt. Remember the Bank nominal code is intended to reflect the transactions on your bank statement, and the statement will tomorrow reflect the banking you have just done. So you need to journal that value to your Bank nominal code. But where from ? From Cash in Hand, which is where the Cash is recorded when you pay off cash or credit invoices.

So to recap Cash invoices self-clear when they hit the sales ledger, unless no payment option chosen
Credit Sale invoices sit on the ledger until you pay them off, when you have cash or chq to bank
Both cash and cheque receipts are transferred to Cash in Hand when cleared and await journaling to Bank
Journaling to Bank makes your Bank nominal reflect the transaction on Bank Statement

Now that the physical Banking is done, print of a daily (or weekly) Bank Statement from your Bank web portal and compare that with the transactions already showing on your Bank nominal code.
Those that are missing from Motorline, now need to be entered. They will be BACS credits often for Sales Ledger balances or receipts from your Franchiser that need to be posted appropriately. This may need a journal (i.e. Credit Vehicle Target Bonuses, Debit Bank) or may need posting to a Sales Ledger Account – i.e. Warranty or Registration Bonuses.  Not sure on Journals ? This is an extract from the nominal manual….

Manual Journals

This function allows you to make journal postings to the nominal ledger.  Each posting consists of a number of lines with a maximum of 99 lines per posting.  The total of the debit entries must be equal to the total of the credit entries before it will be accepted. 

When accessing the function, a journal reference number, generated by the system, is displayed.  There is an option to amend this, but it is recommended that the system-generated reference be kept.  A default posting date can also be entered.  There is also an option to print the journal.

If the sales ledger is in a period ahead of the nominal a journal can be done to the future period.  To do this, change the posting period to the relevant sales ledger period.  Select OK to display the journal screen.

If the same narrative covers all entries, enter this narrative in the header.  It will be displayed against all entries when updated onto the relevant accounts.  If the narrative required is different for each line, leave the header blank and enter the narrative against each line.  A mixture can also be used, e.g. Enter a header narrative that is relevant for a number of lines and only enter a narrative against the lines that are different from this header narrative. If an entered narrative is to be repeated on the next line, enter an equals sign (=) at the beginning of the narrative and press enter and the previous narrative line will be repeated.

Enter the nominal account, then the value under the relevant debit or credit column.  Once all entries have been completed select Continue.  The screen will display a message to inform you whether the postings balance or not. If they balance, select yes to confirm.  If the postings do not balance, options to either delete an incorrect line and/or add the correct line are offered.

In this journal image, for Cash Book, read Cash in Hand, or whatever you call that clearing account in your office.

On some postings extra entries are required as follows:

• Posting a credit value to the bank a/c – a box will display asking for the cheque number to be entered.  If the payment is by direct debit or bacs, the letters DD or BP can be entered followed by the day/month e.g DD1203 will show that the posting was a direct debit taken from your bank on 12 March

• Posting a value to the VAT Input or Output nominal – the cursor will move to the ‘Goods’ column on the journal.  The goods value relating to the VAT amount should be entered.  This value will then appear on the VAT Analysis report and be included in the goods value of the summary.

Once completed the journal reference number is displayed in the bottom left hand corner of the screen.  It is recommended that the journal sheet is printed and filed either in the form of a hard copy, or a pdf copy to a folder off the A directory in the system. 

Once you have posted all the remaining items and have effectively ticked off all transactions you are ready to reconcile.

There are 2 accounts to reconcile – Cash in Hand and Bank.

CASH in HAND

Reconciling this account allows you to view the account through a filter that shows you all the Reconciled OR Unreconciled OR All transactions on the account. In reconciling you are not affecting the underlying data, simply showing yourself where you have got to in the reconciling process. You could, if you so wished, Reconciled once a year and do it all in one go. You would not then need to know where you had got up to as is was a continuous process. But I am advocating that you do this every day. So you do need to know where you are in the process, especially if you work part time or ever take holidays !

Suggest screen dump of cash in hand is shown

The filter should be set to view Unreconciled items.  
You can see boxes in the left hand column where you can tick the relevant transaction and in “Selecting” that item, you amend the Selected Total figure below the transaction box on the right of the screen.

When reconciling Cash in Hand, you want to match the journal you have done which Credits Cash in Hand to the invoices above which are all Debits. You must achieve a Selected Total of ZERO before you update the reconciliation. This will mean that the Journal to Bank (the credit value on this account) exactly matches the invoices that have been paid. ***TIP*** Always check the invoice numbers, especially where you have multiple entries of the same value. If not you don’t know which ones have not been properly receipted.

As soon as you have matched the values and Selected Total is ZERO you can click the “Update”” button. This “Sets” the ticks, and these items will then disappear from view. This also means the Unreconciled view is all the items that remain outstanding and may need chasing the departments for (incorrect selection of Payment type is often a cause). You can also review the Items that you have Reconciled by clicking on the Reconciled radio button and this will change the view to Reconciled.

The objective here is to keep the list as small as possible and the queries minimised. That way you know you have banked all the cash received and transferred it successfully to the Bank nominal. All that should be remaining on a daily basis is the cash received since the last end of day report was done in Parts and Service (plus any Car Sales cheques received). If you achieve this, then you are completely on top of the work load !

Below this is an extract from the Nominal Ledger Manual…..

This function aids in the reconciliation of selected accounts. You can batch the reconciliation entries by setting the audit Trail parameter to Yes.(This allows you to view the actual transactions grouped together when you clicked “Set All”)

• When first accessing the reconciliation program and if the parameter above is set,  the screen will display as follows.   Enter a narrative for the batch e.g. banking 3.3.10 denoting that this is the reconciliation for the banking done on 3.3.10. Click the Reconcile button to continue with the reconciliation.

• When the screen is displayed choose the relevant account. The values at the top right of the screen are those from the account and will not change during the reconciliation.
• The values at the bottom right of the screen are the current values relating to the transaction period being reconciled and will change during the reconciliation when the UPDATE is performed.
• The top left of the screen displays the account being reconciled and the current nominal period. The words BEFORE or AFTER may also be displayed depending on whether you are viewing Previous, Current. Future or ALL (periods) .

• Down the left hand side there is a tickbox to mark items that you are reconciling. To unset an item just select a ticked item and it will be unset.  BEFORE moving to another period or transaction type you MUST select the UPDATE otherwise your work will be lost.
• Other features within this function are:
• Set All/Unset All – Selecting either of these will set or unset all entries in the period you have chosen. Ticking the checkbox in the header will perform the same function.
• Balance – If you select the balance  button a field opens below the ‘Selected Total’.  Enter a balance you wish to reconcile to and until this balance is achieved you will not be able to save and exit.
• Move – This function allows you to move a transaction to another nominal account. Highlight the relevant transaction and select MOVE. The screen will open up a nominal account search screen from which to select the code.  Once chosen a confirmation screen detailing the account from and to will display.  You can only MOVE items in Current and Future periods.
• Drill – This allows you to view or print all transactions associated with the one highlighted when you select the drill button. Note: click on the reference number to highlight.

Include YE B/F Balance in Reconciled Total  -  This checkbox will only display if you are viewing Current or ALL transactions. When ticked it will include the B/F year end balance in the reconciled value.

• The transactions can also be printed.
• To view previous batches click on the Audit View option.  You can then choose a year, a month, a day and a batch then view the entries within the batch

This reconciliation should be carried out on all clearing accounts each month. Examples of these accounts are:

• Inter Dept Transfers
• External Work
• Cash in Hand
• Petty Cash
• GRNI
• Warranty FOC Parts Clearing (Skoda/Seat)
• Warranty Credit Note Clearing (Skoda/Seat)
• Inter Location Transfers  (Multi Location)
• It should also be used to reconcile the Bank account.

For Balance Sheet accounts that will have unreconciled items at the year end, please ensure the account is marked to ‘Reconcile’. This will ensure that any unreconciled item will be kept open over the year end to allow you to reconcile it in the new year.  The brought forward balance on these accounts will reflect only the balance reconciled at the year end.

Note: If the account is not marked to ‘Reconcile’ the year end will consolidate all transactions into one brought forward balance and the unreconciled items will not be available in the new year.

BANK

Reconciling Bank is slightly different, although the principles remain the same.

In reconciling the Cash in Hand account you were matching multiple Debits to a credit, so that the values agree and balance.  When you are doing so with the Bank Nominal, you are still matching Debits and Credits, but they are in different places. The Debit is on your Bank nominal code, and the credit is on your Bank statement. So as they are not within the same nominal code, you cannot seek to match a balance of zero, instead you are only matching the movements in your Bank for that period. The ticks are to agree that the transaction is on the Bank Statement only. Once you have agreed them all you can “Update”. The remaining items then on your Bank Nominal code will be the outstandings as far as your Bank reconciliation is concerned. 

So to complete the reconciliation, take the Nominal code balance and adjust for the outstanding items – this should agree with the Bank statement closing value.

Shimples !