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Definition: What is it?

An Account Reconciliation is a tool that is used to flag that an accounting transaction has been verified as correct and that the balance of the general ledger account should be increased or reduced by that amount. Normally a reconciliation would consist of many individual transactions and each one would be marked as verified as part of the process.

Account Reconciliation is done by account which means that each general ledger account that has at least one transaction will need to be reviewed and then reconciled.

Currently in OFBiz an Account Reconciliation can be created even if the accounting transaction has already been posted to the general ledger.

IMPORTANT NOTE: There is a bug here because if the transaction is posted before the account reconciliation takes place then the accounting transaction keeps re-appearing in the account reconciliation screen. This means that you can create multiple account reconciliations for the same entry....which shouldnt be the case..... Do you need to switch off the automatic posting to the GL if the transaction hasnt been reconciled?????

Another potential issue is that the reconciled balance field of the general account doesnt add up - it seems to just use the value of the last accounting transaction. Should the reconciled balance field keep track of the running total of the general ledger account a bit like the trial balance ????

What is it used for?

What is it used for?

All businesses will need to reconcile and validate the entries in their chart of accounts for tax or fiscal purposes. Account Reconciliation is used to verify the balances of each account as at a certain date. Usually a fiscal year is broken down into smaller periods (eg month, quarter etc) and a business would normally want to ensure that their accounts are validated and reconciled from one month to the next. This is extremely important for processing things such as VAT or GST.
Example

A company receives a bank statement detailing all the transactions for the month. Assume that the bank statement reflects all the sales and payments that have been processed in OFBiz.

• Using the Account Reconciliation you will select 111100 General Checking Account (as this account should mirror exactly your bank statement)
• Using the bank statement as the master you will mark (or select the check box) next to the screen transactions that match
• All the transactions selected will be summed (or totalled) and the balance of that calculation will be stored as the 'Reconciled Balance'
• The Reconciled Balance should match the closing balance of your bank statement

NOTE: It may be that additional transactions that are not processed in OFBiz (or have not yet been processed) are shown on your bank statement but not on the screen. This means that your reconciled balance will not match until you create accounting transactions to reflect the missing ones. To do

What's on the screen?

To do

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