Hi Hasan,

Please, could you help me with the Cash Management Reconciliation variance issues. There are some unexplained variances when reconciling cash Management with general Ledger relevant accounts.
The client main worries is to be unable to explain the variances appearing in the bank reconciliation, no matter what is happening is causing it, then to review, evaluate and the system setup and the business processes.

1)The client has not implemented neither Cash Clearing account nor Bank Charges account (meaning that when payment is issued or receipts are applied, the GL Cash account is instantly hit). Could this be the problem liked to the unexplained variances?
2) The client runs automatic bank reconciliation and occasionally or rarely does manual reconciliation.
3) They have never run Bank Reconciliation Cashflow program and they do not even know what it means. What problem this can cause?
4) When running General Ledger Bank Reconciliation report, they provide the value zero as athe opening bank statement parameter, whereas the value is actually not zero. Would this distort the report output?
5) Would the timing differences (say, a day or hours differences) of the various bank reconciliation reports production also be a possible source of the variances?
6) The client goes back more than 3 or 6 months as their report date parameter. Could this also explain the unexplain variances.

Please, could you provide the best, clear and simple approach to doing bank reconciliation at the end of each day, or at the end of the month, depending on the organization need whilst addressing the following points:

a) The bank reconciliation reports needed to run the item of figures to appear in the reconciliation process.
Should the bank statement opening balance figure be assumed to be zero even when it is something like $3,000, when providing parameters for “General Ledger Reconciliation Detail report”?
Is it a problem to be going back to a remote period, or future period when providing the report date parameter?

I have attached a Workbook comprising of two worksheets, one on how the client has been doing bank reconciliation process, and the other worksheet, on various bank statement reports figures which you may want to explain in relation to bank reconciliation compilation.

Thank you very much.