After account transactions from your bank have been imported into DEAR, you need to reconcile them to make sure that the transactions from your bank statement and the transactions in DEAR match.
NOTE: If you are using Xero as your accounting system, this function will not be available in DEAR. You can manage your bank reconciliation actions through your accounting system.
- Set up the Chart of Accounts
- Set up Bank Accounts and import bank statements
- Set up Tax Rules
- Users will need the Financial: Bank permission to reconcile bank transactions.
Table of Contents:
- Reconcile Bank Transactions
- Creating transactions during bank reconciliation
- Reconcile a Transfer between bank accounts
- Bank Rules
Reconcile Bank Transactions
The first step is to review what has been imported. Then you can match up transactions from your bank with transactions in DEAR.
Reconcile bank transactions:
- Navigate to Financials → Bank Accounts.
- Find the bank account you want to reconcile. Click Reconcile [number] items or I would like to → Reconcile Account.
- Review each account transaction imported from your bank. We refer to these as bank statement lines, and they're on the left of the Reconcile screen. DEAR will attempt to match the bank statement lines with transactions in DEAR automatically.
- First, check if the statement line is matched with the correct transaction. Sometimes DEAR finds more than one transaction (of the same amount and a similar date) to match with the imported statement line. When this happens, DEAR matches the most likely transaction and provides a link to other transactions that are good alternatives.
- If DEAR has matched the statement line with the correct transaction in DEAR, click Match & Reconcile to accept the match. If the DEAR transaction is not a match, click Find & Match or the Total possible matches link to search transactions for alternatives.
- This opens the reconciliation window. Select one or more transactions to reconcile with the bank statement line, they will be shown in the lower window.
- You can then add any bank fees or minor adjustments, if applicable.
- When the totals match, click Reconcile to finish.
Creating Bank Transactions during Reconciliation
If DEAR can't find a match or doesn't offer a suitable suggestion during bank reconciliation, the statement line is left unmatched for you to create or find a transaction to match with it.
Create a transaction only if there is no match or suggestion, and you haven't entered the transaction in DEAR yet.
NOTE: Don't create a transaction in the following situations:
- Transaction is already created: If you've already entered the transaction in DEAR, find the transaction instead of creating one.
- Bank statement line is for an invoice: If the bank statement line represents an invoice and you haven't entered the invoice transaction, enter the invoice transaction outside of bank reconciliation and then match it.
- Bank statement line is for a bill: If the bank statement line represents a bill and you haven't entered the bill transaction, enter the bill outside of bank reconciliation and then match it.
- Bank statement line is for an expense claim: If the bank statement line represents an expense claim and you haven't entered the expense claim transaction, enter it outside of bank reconciliation.
- Bank statement line is a bank transfer: If the bank statement line represents a transfer between accounts and you haven't entered the transfer in DEAR, reconcile it using the Transfer tab.
If none of these situations are the case, you can create a transaction in DEAR to reconcile it.
Create Spend or Receive Money transactions to reconcile:
- Next to the bank statement line you want to reconcile, click the Spend/Receive tab.
- Add or enter the following information:
- New/Existing customer or supplier – choose from the dropdown or enter a new one using Add new customer/supplier.
- Choose Account – this is the account, from your chart of accounts, you want to code the transaction to.
- Why (Optional) – enter a description.
- Tax Rule – select the required tax rule related to the transaction.
- Click Create & Reconcile button to reconcile the transaction.
Reconcile a Transfer between two Bank Accounts
When you've imported a statement line showing a transfer but you haven't yet entered the transfer into DEAR, use the Transfer tab to reconcile a transfer from one of your bank accounts to another.
Create a quick Transfer and reconcile it:
- On the bank reconciliation screen, next to the bank statement line you want to reconcile, click the Transfer tab.
- Select the bank account you wish to make a transfer to/from.
- If the statement line shows withdrawal, select the bank account you transferred the money to.
- If the statement line shows a deposit, select the bank account you transferred the money from.
- Click OK.
- You don't need to create a transaction in the second bank account – this is done automatically. You will still need to reconcile it with its matching bank statement line.
More detailed transfers can be created with extra details, for example, memos or attachments.
Create a more detailed Transfer and reconcile it:
- Go to Financials → New → Transfer Money
- Enter your bank transfer details.
- (Optional) Add a Reference and/or a Memo.
- Click Complete.
You don't need to create a transaction in the second bank account – this is done automatically. However, you'll need to reconcile it with its matching bank statement line.
Bank Rules can be used to automatically reconcile bank statement lines with transactions in DEAR.
Create a Bank Rule:
- Navigate to Financials → Bank Accounts.
- Click I would like to → View Bank Rules.
- In the View Bank Rules screen, click + (i.e. Create a new rule) and select from:
- Spend Money rule
- Receive Money rule.
- Enter the conditions to build the rule and Save. When an existing rule is found based on the set conditions, DEAR will suggest a match. Click Apply rule to automatically reconcile the transaction.
NOTE: Rules can be created during reconciliation. Use the Reconciliation Rule tab and click New Rule to add a new rule.
What's the difference between Any and All (...of the following conditions)?
- All – The rule is applied only when every condition is met. If one condition doesn't match, for example, if a particular piece of information is missing from a statement line, then the rule will not run. This makes the rule more restrictive.
- Any – The rule is applied if only one of the conditions is met. The rule won't fail just because one or more conditions don't match. This makes the rule less restrictive.
Allocating fixed value line items (optional) and the remainder
You can set up your bank rule to allocate one or more fixed-value portions of the transaction to an account in your Chart of Accounts.
After you've set up any fixed value allocations, you need to tell DEAR what to do with the balance of the transaction. You can allocate the remainder to one account in your Chart of Accounts or split it between two or more.
- the Amount of a fixed value allocation as either a positive or negative number with up to two decimal places,
- the Percent of a remainder allocation as either a positive or negative number with up to two decimal places.