How to Reconcile your Client/Trust Bank Account

Migration Manager’s bank reconciliation feature should be used regularly to make sure that the records in Migration Manager match the records in your client/trust account bank statements.

Note: Migration Manager shouldn't be used to reconcile your office account because it doesn't have a full record of all office account transactions. Transactions such as rent and wages are recorded in your accounting software but not in Migration Manager, so you should use your accounting software for office bank account reconciliations.

Quick Tip - to simplify the bank reconciliation process, it’s best to enter as many transactions in Migration Manager as possible before the end of the reconciliation period. In order to meet trust fund accounting requirements, a transaction that occurred during the reconciliation period but wasn't entered in Migration Manager until after the reconciliation period can’t be matched directly. Instead, you need to create an adjustment and later reconcile the adjustment. If you enter all transactions in Migration during the reconciliation period they occurred, you can match the transactions directly instead of creating adjustments.

1. Open the Bank Reconciliation Form

Click the Accounts button in the main menu then select Client/Trust Account Bank Reconciliation.

You will be asked to select a Client/Trust bank account. Select the bank account you would like to reconcile then click the Select button.

2. Create a New Bank Reconciliation

The Bank Reconciliations window will now appear. Click the New Reconciliation button.

3. Import the Bank Statements you want to Reconcile

You will be asked to import a bank statement. If you haven't already imported your bank statement/s, click Yes.

3.1. Download your Bank Statements

Login to your bank's online banking system and download the bank statements you want to reconcile. Migration Manager can import bank statements as .qif files, .ofx files or .csv files that have been downloaded from your online banking.

3.2. Find and Select the Bank Statement file to import

When the Import Bank Statement window appears, click the Browse button to search your computer for the bank statement file you downloaded from your bank as part of step 3.1.

3.3. Review and Import Transactions

The statement file will now be loaded in to the Import window. You should now check to make sure you have not previously imported any of these transactions (these will be shown in Red). If you’ve already imported them, you should select a different bank statement to import.

When you are ready to import the transactions, click the Import button.

3.4. Click Close

When the import has finished, click Close.

4. Enter the Bank Statement Details

When the Bank Statement Details window appears, enter the following details based on the information from your Bank Account Statement

  1. the bank statement start date - this is the start date of the period you want to reconcile.
  2. the bank statement opening balance - check your bank statement and find the opening balance as at the statement start date you entered above.
  3. the bank statement end date - this is the end date of the period you want to reconcile.
  4. the bank statement closing balance - check your bank statement and find the closing balance as at the statement end date you entered above.

Click the Continue button.

Note - if this is the first reconciliation you've done in Migration Manager, you will be asked to enter the statement start date and statement opening balance. If you've already done one or more reconciliations, these values will be filled in automatically based on the values from the last reconciliation, and you won't be able to change them.

5. If necessary, select transactions to exclude from the bank reconciliation

If this is the first time you’ve done a bank reconciliation in Migration Manager and there are transactions in Migration Manager from before the reconciliation period, you will be asked to select the transactions to exclude from the reconciliation. This usually happens if you were using Migration Manager’s accounts system before the bank reconciliation functionality was made available. Migration Manager will display a list of all transactions that were entered in Migration Manager before the reconciliation period. Check this list carefully. If any of the transactions listed should be included in the bank reconciliation, untick them. When you've finished checking the list, click the Exclude Ticked Items button.

If you don’t see the form below, you can ignore this step.

6. Reconcile Bank Account Window

The Reconcile Bank Account Window will now appear. On the left hand side is a list of all of the transactions from the imported Bank Statement. On the right hand side are a list of all of the transactions that are in Migration Manager that may potentially correspond to the items in the Bank Statement. You now need to reconcile these transactions by either:

  • Matching transactions on the left and right hand side
  • Creating a new transaction in Migration Manager if one doesn't exist
  • Creating an Adjustment if a transaction has been recorded in Migration Manager but was recorded outside of the reconcilled time period.

7. Find the Matches

For each bank statement line, the reconcile window will show a list of potential matching transactions that have been entered in Migration Manager during the period being reconciled. If you agree with the match , click the Match button.

The row will turn green to indicate that this bank statement line has been matched.

 

Continue matching all of the matching transactions and statement lines. Note that if there are two transactions recorded in in Migration Manager that are close potential matches, you will need to decide which transaction is the actual match.

 

Note  if you match the wrong transaction by mistake, you can undo the match by clicking the Undo Match button.

8. Deal with any Adjustments

If the transaction occurred during the reconciliation period but wasn't recorded in Migration Manager until after the reconciliation period, you won't be able to directly reconcile the transaction. To comply with trust accounting regulations, you will need to create an adjustment then reconcile the adjustment in a later period. If an adjustment needs to be created, you will see an Adjust button instead of a Match button.

Click the Adjust button. You will be asked to enter a description for the adjustment.

Enter a description for the adjustment then click the OK button. Migration Manager will create the adjustment and reconcile it. The row will turn green to indicate that the bank statement line has been matched.

See Step 11 for details of how the reconcile the adjustment in the later reconciliation.

9. Deal with Bank Statement transactions with no potential matches in Migration Manager

If Migration Manager doesn’t show any potential matches or if none of the potential matches are right, there are several possible reasons:

9.1. A single bank statement line was entered into Migration Manager as two or more transactions

This might occur when a client has made a payment in to the bank account for multiple matters, and that one large amount has been recorded as multiple smaller transactions in Migration Manager. To reconcile this scenario, do the following

9.1.1. Open the Find Match Form

Click the Find Match button.

9.1.2. Match the Transactions

When the Find Match Form is displayed, tick the Migration Manager transactions that are a match, then click the Match button. The bank statement line row will turn green to indicate that this bank statement line has been matched.

9.2. Two or more bank statement lines were entered in Migration Manager as a single transaction

9.2.1. Open the Find Match Form for the First Bank Statement Line

Click the Find Match button for the first bank statement line

9.2.2. Match the Transaction

When the Find Match Form is displayed, find the matching transaction that was recorded in Migration Manager and tick it (it will most likely be for an amount greater than the line shown on the bank statement).

You will be asked if you want to apply a partial amount. Click the Yes button.

Click the Match button. The bank statement line row will turn green to indicate that this bank statement line has been matched.

9.2.3. Open the Find Match form for the Second Bank Statement Line

Click the Find Match button for the second bank statement line.

9.2.4. Match the Second Bank Statement Line

When the Find Match Form is displayed, find the transaction that was recorded in Migration Manager. In this example, you will notice that the Received amount now shows $3000 instead of $7000. This is because $4000 has already been matched to the first bank statement line so there is only $3000 remaining to be matched. Tick the transaction and click the Match button.

9.3. The Transaction Hasn't been Entered in Migration Manager Yet

If you can’t find a match using any of the above methods and you’re sure the transaction hasn’t been entered into Migration Manager yet, create a new transaction in Migration Manager:

Click the Create New button and select whether you want to create a new Client/Trust receipt, Client/Trust to office transfer or Client/Trust payment.

When the New Client Receipt, New Client to Office Transfer or New Client Payment form is displayed, enter the transaction details and click the Save and Close button. The bank statement line will be automatically matched to the new transaction and the row will turn green to indicate that the bank statement line has been matched.

10. Check for Reversed Migration Manager Transactions that Don’t Appear on the Bank Statement.

When a transaction has been entered in Migration Manager and then reversed, the transaction and its reversal might appear on the bank statement (e.g. if a cheque was dishonoured), but often they won’t appear on the bank statement at all. This commonly happens when someone made a mistake entering the transaction in Migration Manager, then had to reverse the transaction and record it again. If the transaction does appear on the bank statement, it should be matched using the steps above. However if it doesn’t appear on the bank statement, it should be excluded from the reconciliation.

The bank reconciliation form will list any transactions that have been reversed and can be excluded. Check these transactions carefully to make sure they don’t appear on the bank statement. If they don’t appear on the statement, click the Exclude button to exclude the transaction and its reversal from the reconciliation.

11. Match any Adjustments from Previous Reconciliations

If you recorded an adjustment in a previous bank reconciliation and the adjusted transaction was recorded in Migration Manager during this reconciliation period, you will need to match the adjustment to the adjusted transaction. Click the Match button. The row will turn green to indicate that the adjustment has been matched.

12. Add any Manual Adjustments

In very rare cases, you might have a bank statement line that doesn’t relate to a particular client or clients, e.g. if your client bank account was incorrectly set up and you have been charged bank charges or have received interest. If this occurs you should create a manual adjustment in the bank reconciliation.

12.1. Open the Adjustment Form

Click the Find Match button.

When the Find Matching Transactions Form is displayed, click the Add Adjustment button.

12.2. Create the Adjustment

When the Adjustment Form opens, select Manual Adjustment, enter a description and click the Save & Close button. The bank statement line row will turn green to indicate that the line has been matched.

13. Check whether your Reconciliation Balances.

When you’ve matched all bank statement lines and excluded any reversed Migration Manager transactions that need to be excluded, check the Out of Balance amount and the Variance. If the reconciliation balances, these will both be zero. If they’re not zero, see Why doesn’t my Bank Reconciliation Balance?

14. Finalise the Reconciliation

When the reconciliation balances, click the Reconcile button to finalise the reconciliation. A reconciliation report will be created and the reconciliation will be finalised.

A report will now appear with details of the Reconciliation.

Quick Tip  if you’re part way through a bank reconciliation and you want to close the bank reconciliation, Migration Manager will automatically save the reconciliation for you. You can come back and finish it whenever you’re ready.