How to Bank Reconcile

[Lurch]

@LVSCTreasurer

I post the payment for a purchase invoice when I pay it.Should I wait until it is cleared throug the bank before it is paid?

That’s how I do it, all payments are done via tagging from the bank once the transactions are imported. Much harder to get it wrong which means there is no real need for reconciling. I have been doing this for the last 2+ years and have never reconciled and everything is spot on.

@LVSCTreasurer

You mentioned a cheque holding account how could this operate?

Uncleared Cheques and Bank Tagging

The other thing you can do is create a “cheque holdings account”. This is just a type of bank account used to track presented but uncleared cheques. So effectively as soon as you send the cheque you can mark the invoice as paid, but instead of paying it from the current account you would pay it from the cheque holdings account. Now that cheque holdings account is overdrawn, when the cheque payment finally appears on your current account you then just tag it as a transfer to the cheque holdings …