Whether you are new to Microsoft Dynamics GP or have been processing transactions in Dynamics GP for years, all companies seem to struggle with how best to perform bank reconciliations in Microsoft Dynamics GP. More and more, we are finding companies want to reconcile both their bank and credit card statements in Dynamics GP by downloading their statements from their bank and credit card companies’ websites, importing the files into Dynamics GP and having the system automatically reconcile the cleared transactions.
Two options have emerged to help Dynamics GP users accomplish this objective. Which option you choose will depend on which one better meets your organization’s needs. To help you determine the option that is best for you, let’s take a deeper look at two of the leading offerings: Core Bank Reconciliation Functionality by Microsoft Dynamics GP and Advanced Bank Reconciliation by Nolan Business Solutions.
Option 1: Core Bank Reconciliation Functionality by Microsoft Dynamics GP
In core Microsoft Dynamics GP, users can combine the functionality of the Bank Reconciliation (BR) and the Electronic Bank Reconciliation (EBR) modules to track the bank activity and automatically reconcile some cleared transactions. The BR module serves as another sub-ledger similar to the Accounts Payable (AP) or Accounts Receivable (AR) sub-ledgers. As such, you cannot journalize transactions directly to Cash or those transactions will bypass the sub-ledger and will not be available for you to reconcile. This is often a point of great confusion for users who are new to Dynamics GP as usually their legacy system did allow them to post journal entries directly to their Cash account.
The BR module performs a three-way comparison of the Checkbook Balance/Cash Sub-Ledger, the General Ledger Cash Balance and the Bank Statement. This option tends to work well if you process both Sales and Purchasing transactions in Dynamics GP and therefore do not import cash activity from an external system, such as a point-of-sale or membership system. With respect to those Purchasing transactions, it works best if you primarily pay your vendors by check since the EBR module in core GP cannot efficiently auto-reconcile ACHs/wires or other banking activity outside of the standard options of Checks, Deposits and Transfers.
The chart below breaks down the main pros and cons if you are considering using the core Microsoft Dynamics GP BR and EBR modules.
Pros
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Cons
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You already own it.
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Forces you to enter all transactions in a sub-ledger;
cash transactions cannot originate in the GL or they
bypass the BR module and are not available for reconciliation.
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Accurately displays the “Checkbook Balance” in various Inquiry windows.
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Cannot import into batches in the BR module;
transactions post automatically with no chance
for review/correction.
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Efficiently auto-reconciles Checks, Deposits and Transfers.
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Cannot efficiently auto-reconcile other types
of transactions such as ACHs, Wires, Bank Fees,
etc., since EBR will only auto-reconcile
when the Date, Amount and Document
Number are equal.
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Does not allow you to undo a previously
performed reconciliation if you accidentally reconciled the wrong transaction.
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Option 2: Advanced Bank Reconciliation by Nolan Business Solutions
Nolan Business Solutions, a well-respected company within the Microsoft channel, offers a BR module called Advanced Bank Reconciliation (ABR), which includes similar functions of the core Dynamics GP BR module while eliminating the concept of a bank sub-ledger. ABR performs a two-way comparison of the General Ledger Cash Balance and the Bank Statement. Using ABR, there is no Checkbook Balance/Cash Sub-Ledger to maintain or close out on a monthly basis.
This method tends to work well if you process cash transactions outside of Dynamics GP and want to import that activity into Dynamics GP via a GL Journal Entry. Additionally, it works well if you pay your vendors by ACHs/wires in addition to checks since the ABR module can efficiently auto-reconcile ACHs transactions while the core Dynamics GP module cannot.
The chart below breaks down the main pros and cons if you are considering purchasing and implementing the ABR module by Nolan Business Solutions.
Comes with three free hours of setup/training with purchase; often enough time to set up one checkbook and perform first reconciliation.
Pros
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Cons
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Removes the concept of a bank sub-ledger;
allows you to enter journal entries directly to cash.
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Additional purchase.
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Can use the Copy → Paste functionality that
exists in GP2013, R2 and newer versions to
copy Cash transactions directly from an
Excel spreadsheet into the GL Transaction
Entry window.
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If you are already using the GP BR module, you will need to perform a one-time task to set up your Checkbook in the ABR module.
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Efficiently auto-reconciles Checks, Deposits, Transfers,
ACHs, Wires, Bank Fees, etc., because you can
set up countless Reconcile Rules to ensure 80 percent or more of transactions auto-reconciled, leaving you to only concentrate on a select few.
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Provides for the ability to undo a previously performed reconciliation if you accidentally reconciled the wrong transaction.
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Both of the above options will allow you to reconcile on a daily, weekly or monthly basis, and give you the ability to pick the frequency based on your business needs. The ultimate goal is not to spend hours reconciling your bank statements, credit card statements or getting your cash transactions into Microsoft Dynamics GP. Ultimately, you want to go with the option that will better facilitate this process at your organization and provide you with more time for strategic activities.
Read More: Are you on Microsoft Dynamics GP 2015 Release 2? If not, you should be before Microsoft releases the year-end update, especially if you use the Payroll module in Microsoft Dynamics GP. Learn more in our blog, Microsoft Dynamics GP Users are You Ready for Year-End?
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