Bank reconciliation is an important part of the accounting cycle to ensure accurate books.
1. Add a bank, petty cash, or credit card account
First, add your bank account:
- On the left side menu, click on
- In the
Bank Accountslist, click
Add bank account.
- Enter a friendly name, e.g. “HSBC xxx101 Primary Account”, then select the account type and the currency.
Once you’ve completed these fields, an
Asset account with the same name will be automatically created in the
Chart of Accounts and linked to the bank account.
Additionally, your bank account will now show up as an option in the
Paid through drop-down whenever you’re recording a payment for an invoice, bill, credit note, payslip, or expense.
2. Import your bank statement
Watch this video on how to import your bank statement or read on below.
- From your list of bank accounts, click on the
Statementlink, then click on
Import a statement.
- You will be presented with a form asking you to upload your statement in the specific csv, xls, or xlsx formats. To do this, you can either drag and drop your file or click on the form to choose it.
- Map the column names in your file to the column names in Wafeq. As you are doing so, Wafeq will present you with a preview of your import.
- Once you are done, click on
Savein the top right corner to import your statement.
Import your statement balance
When preparing your statement CSV file, make sure you include your statement balance so you can verify that your books are correctly reconciled.
3. Reconcile your transactions
Watch this video to learn how to:
- Quickly classify transactions to accounts.
- Make advanced reconciliations to payments, invoices, bills, and expenses.
- Add adjustments to the reconciled transactions when needed.
To start reconciling, go to
Bank transactions in the left side menu, then click on the
Reconciliation by directly classifying transactions
Classify to account column, you can easily match transactions to accounts. For example, if you have charges coming from your bank account, choose the
Bank Fees and Charges account for these transactions. Wafeq will mark these expenses as reconciled and will automatically create them in your expenses sheet. Other transactions are treated similarly and can be classified to their relevant accounts.
Reconciling by matching with existing transactions
If you've already recorded a transaction in Wafeq, you can match it with your bank statement transaction during reconciliation. For example, when your customer pays you for an invoice, you can match the payment you’ve recorded in Wafeq to the transaction that you’ve received in your bank account. To do that, click on the
Reconcile button of the relevant transaction, and from the reconciliation panel select the invoice payment from Wafeq, then click on the
Match selected button.
The status of your transaction will change to
Reconciled and a green double tick will be added next to your payment indicating that it has been matched to its specific transaction.
If your customer has paid you but you still haven’t recorded that payment in Wafeq, you can also reconcile the transaction you’ve received in your bank account to your customer’s invoice. Wafeq will automatically create the invoice payment and will mark it as Reconciled, and Paid through your bank account.
In case you find differences between your bank statement’s transactions and Wafeq’s, you can add an adjustment to your reconciled transactions. Simply click on the Add adjustment button in the Description column of the reconciliation panel, and choose the account where you’d like to record that discrepancy.
Then click on the Match selected button for Wafeq to mark your transactions as reconciled and create the transaction of the account you’ve chosen for the adjustment.
4. Check the Bank Reconciliation Report
When you've reconciled all the transactions on your statement, the balance of your bank account in Wafeq and the balance from your bank statement must match. If they don't, it means there are either additional or missing transactions that you haven't reconciled. The
Bank Reconciliation Report explains differences in your bank statement balance versus your ledger balance and gives you the source of the difference.