Bank Reconciliation Differences in NetSuite: Tips to Resolve

NetSuite can help simplify accounting processes

Guide to NetSuite Accounting and how to Solve Bank Reconciliation Difference

Bank reconciliation is known as the process of matching the data in your records for a cash account to the corresponding information on a bank file. The goal of this procedure is to determine the differences between the two and, if necessary, to record adjustments to the financial records. In other words, The reconciliation of bank statement aids in the discovery of discrepancies between the bank and book balances.

When performing a bank account reconciliation, you will often encounter two types of unknown factors between you and the bank. The first factor is a transaction you created that the bank does not know about. The second factor is a transaction your bank recorded that you don't have in your books. The first factor is usually easily solved by accountants, so we will be focusing on the second factor for the time being.

NetSuite can help simplify accounting processes

NetSuite can help simplify accounting processes

How ERPs can Help you

Now, any self-respecting entrepreneur would want the most efficient and precise method to do bank reconciliation. After all, financial statements are essential in daily operations, and even the smallest discrepancy can have a massive effect. 

To that end, it is recommended to get yourself a reliable ERP software for your accounting and finances. Through data integration, Enterprise Resource Planning solutions assist businesses in streamlining their accounting demands. It gives you a clearer picture of all aspects of your business, allowing you to make faster and more accurate decisions that affect your company's operations.

The ERP software allows you to use it as a financial management process. It helps with financial tasks like client payment plans, credit management, and revenue tracking.

Because it has a high level of monitoring capabilities and is an automated process, it's simple to manage billing, revenue, and payments. Even better, you can use an ERP software to measure profits produced by the firm, invoicing, cost analysis, and budgeting.

Fortunately, NetSuite allows you to import financial statements for matching. But how does it work?

Why NetSuite?

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First off, let's establish the pros of NetSuite and why you should absolutely use it for your financial processes. The NetSuite Accounting system is a basic module that is included with the NetSuite ERP and addresses all of your common accounting needs, including reporting, finance, and ledger updates.

This method records all General Ledger arrangements necessary to build a financial strategy to provide strategic guidance that complies with current tax regulations.

The general accounting feature will assist your business in maintaining profitability while adjusting to industry developments. You may get accurate financial statements for any sales arrangements with the revenue recognition management tool.

Standard reports can be used to learn more about your company's classification, or a customized report can be used to learn more about your transaction data.

For your accountant function, you can create personalized dashboards. You can add financial report shortcuts and the most popular KPIs that your organization may need. When you initially log in, all of this may be shown on the first page.

Importation of Bank Statement

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NetSuite's online banking data import and online banking statement functionalities are intended to speed up the bank reconciliation procedure. The user will first import the desired banking or credit card transaction information at a high level from an existing bank account.

Using various matching criteria, NetSuite will attempt to make transaction matches from the imported bank statement to contracts and agreements already entered in NetSuite.

This import does not initiate transactions in NetSuite; rather, it gives information on which deals have been submitted to the bank or credit card account.

Bank Reconciliation Through NetSuite

You may reconcile bank statements in your NetSuite account in a couple of ways: manually marking off all the debits and credits, or by importing your online bank account register. Importing your bank statements wasn't always simple in the past.

One of the new features in recent updates is the Bank Feeds Suite App. This new feature simplifies the import process by allowing you to import deals and outstanding amounts directly from the bank without manual intervention.

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When bank data is imported into NetSuite, the Intelligent Transaction Matching functionality uses reconciliation rules to match imported lines to agreements through an automatic process.

The use of spreadsheets or third-party applications is not required if you want to manually match exceptions and reconcile transactions.

If importing account statements is difficult or impossible, you can mark related account deals as cleared in NetSuite without importing the corresponding bank lines.

Submit the client deal when you've finished manually matching them or marked them as cleared. Review the submitted agreements on the Reconcile Account Statement page, then include or omit transactions from the reconciliation before reconciling the statement.

Go to Accounting Preferences and click the Show All Transaction Types In Reconciliation box to reconcile bespoke transactions.

After you've imported the data into NetSuite, go to the Match Bank Data page to match, evaluate, or exclude transactions. This page displays side-by-side lists of imported data and NetSuite transactions.

Next, submit your matches so that they are cleared in the system, then examine and reconcile the statement on the Reconcile Account Statement page. You can do this step through manual matching.

What's Next After Reconciling?

After you've finished importing your statements into NetSuite, you can view your reconciliation summary report. The Reconciliation Summary report summarizes your bank account reconciliation and offers balances for each item. However, it is not limited to reconciled and unreconciled items. You can also get a report for:

  • Outstanding amounts for transactions with no prior reconciliation history
  • Totals of your cleared and outstanding transactions during the time period
  • Difference between all reconciled balances and the unreconciled balance
  • Previous bank balances
  • Ending bank balance
  • Current reconciled balance
  • Reconciled balance as of a specific date

It is worth noting that only after you've reconciled the bank account in NetSuite using either the redesigned or classic reconciliation pages can you see the reconciliation summary report.

Transactions cleared on a register but not reconciled display under the appropriate heading on Reconciliation Summary reports.

Because you cannot recapture the same information, it is highly recommended that you print your Reconciliation report before reconciling another account.

What are the Challenges?

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Like any other ERP system out there, NetSuite comes with its fair share of challenges. There is definitely a learning curve involved in using NetSuite for your bank reconciliation. Discrepancies or differences in data can arise at times.

This issue could arise from improper input of transactions in your statements or an error from the bank. Either way, once you see the summary report, you should be able to spot a bank reconciliation difference if you check. Below is a simple guide on how to deal with NetSuite bank reconciliation differences:

NetSuite Bank Reconciliation Difference

Before you can start solving the problem, you must first find the source of the problem. There are ways to fix erroneous transactions upfront. You can review the report for anything that stands out such as outstanding checks, missed transactions, or any related factors.

But if the problem persists, review the bank reconciliations for the previous quarters to see if the issue was resolved in a previous period. If this is the case, look back in time to find the difference.

If you notice an incorrect balance in your bank reconciliation report, you can go to "General Ledger Register" and find the transactions causing the difference, so you can address them. 

Isolate and remedy the transaction

Afterward, you'll have to go to the oldest record you have of bank reconciliations that have the transaction in question within it. You could then correct the transaction record to what it should be. Continue doing so for every reconcile account statement pages from that point until you get to the latest known record. 

Finally, you should be able to reconcile the general ledger account balance with the balance of the bank reconciliation report at the conclusion.

Avoiding Problems

Man in Black Suit Working

In general, we advise keeping your books neat from the beginning to help prevent problems from developing. When you get down to work, it's always more frugal to take precautions to prevent problems rather than investing time and resources trying to confirm transaction matches that don't add up. If the problem seems beyond your capabilities, don't hesitate to get NetSuite support. There will be appropriate experts who can help you with reconciliation in NetSuite. For more banking related concerns, it would be suitable to approach your bank for problems involving accounts, transaction matches, bank data and reconcile concerns.

Conclusion

NetSuite is an ever-evolving program that aims to make your business processes smoother and simpler. The above method for solving NetSuite bank reconciliation differences is one way to manually solve the issue. In the future, NetSuite could evolve to eventually automate this process as well. 

Thousands of businesses rely on NetSuite ERP for accounting functions like auditable and simplified revenue management, spending management, and financial close. They also have real-time access to important information about their financial performance. This platform enhances your software infrastructure's capabilities by integrating with NetSuite's e-commerce, CRM, inventory, and order management technologies.

Unlike previous accounting software, NetSuite ERP accounting software has Business Intelligence functions that assist in forecasting and analyzing sales and growth. You may also determine the best-selling products to customize your marketing for a higher return on investment.

NetSuite ERP accounting software continually stays ahead of the competition with the latest features and improvements to give the greatest performance.

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