FAQ Number : E2                                     Latest Update: 22/5/03

The Balance sheet shows the ‘real’ balance (ie including all unpresented items) held in each bank account and in petty cash. This should be exactly equal to the Cash Book balance for each bank account shown in Transaction Entry – Bank Statements, and to the figure in Transaction Entry – Bank Account Balances.

The Balance Sheet derives its balances for the bank accounts from the Opening Balances set up against each Short Code + or – any transactions processed to the bank account.

The Bank Statement and Bank Account Balances figure is derived from the very first Opening Statement Balance entered in Bank reconciliation + or – any transactions processed to the bank account.

Therefore, if there is a difference between the two it will be either:

1. That the Statement Opening Balance figure entered on the very first bank reconciliation was not correct. It could be that unreconciled items were not accounted for.
2. The Opening Balances entered against the Short Codes were not correct. It could be that a reserve figure should have been entered to show the opening balance not allocated to any specific short code account.
3. Opening Balance transfers to petty cash or other school fund bank accounts were not entered at setup.

To correct:

First, you will need to determine which is the correct figure. To do this, go back to your paper statements for the end of the previous period and complete the sheet overleaf.

1. If Statement Opening Balance was entered incorrectly, then use the Opening Balance Corrector program. Please request from Support.

2. If Unreconciled items were not entered, set up a short code called Unpresented and enter transactions as either receipts or payments coded to this short code. Enter an opening balance equal but opposite to the total value of transactions. (ie if have £50 of unreconciled payments, enter an opening balance of £50)

3. If Bank reconciliation is correct and the Balance Sheet is not, then it will be incorrect Short Code Opening Balances that were entered. Adjust opening balance figures for short codes if the balance sheet has higher values than the Bank reconciliation or enter a new Short Code called Reserves with an appropriate balance, if the balance sheet has lower values.

4. If transfers for opening balances of Petty Cash and/or other bank accounts was not entered at setup, you will need to enter these as transfers now – Transaction entry – Transfers – Bank Transfers and then use the Opening Balance Corrector program to adjust the bank reconciliation figures.

Closing Bank Account balance previous period:

Bank Account 1 paper statement balance                                                A

Total unpresented payments                                                                   B

Total unpresented receipts                                                          C

Cash book balance                                                                                D (A-B+C)

(may need to repeat for multiple bank accounts)

The Opening Statement Balance in Bank reconciliation should have been D.

Closing Petty Cash balance previous period:

Petty Cash balance                                            A                                  E

Total of all banks and cash                                                                     F  (D+E)

Short Code Accounts Reconciliation:

Total Opening Balances (from I&E report)                                     G

F must be equal to G