Banking System Key Operating Tasks

Introduction

The Bank Account System is not the most complex of the modules, but the information in the data base is critical for check and deposit preparation originating in the A/R, A/P, Payroll, and T/R modules. As with all the modules, the Bank Account System has been designed so entry level users can perform most of the basic functions without training. The main reason for this is the presence of the On-Line Help function is available to the inexperienced user.

The main tasks of the Bank Account System are the set-up of bank accounts in the data base, the processing of manual transactions, which aren't usually required, and the reconciliation of bank accounts. We will review each of these tasks below, focusing on the skills required by an entry level user to perform satisfactorily.

Bank Account SetUp and Maintenance

In order to set up a new bank account correctly, the user will need to know the client number the account is to be assigned to (the client must have been set up first), the bank account information (bank name, branch name and address, branch phone number, routing and transit numbers, account numbers), if a beginning balance other than "0" is to be used, or if a particular check number is to be used.

Most of this information is available from bank statements or bank-printed checks or deposit slips, however, a supervisor may need to be involved in the decision about what beginning balance the account should reflect when added to the system or what the first check number should be. Any beginning balance will need to have a G/L journal entry posted to recognize this beginning balance; where this posting will NOT be updated to the bank account when posted.

Adding MICR Line Information

Because this Enterprise application uses a specially designed check and deposit printing feature, an area where input accuracy is critical is in the data to be reflected in the MICR line of any checks or deposits to be printed. The misplacement of even one symbol can result in the failure of checks or deposits to print.

In addition, if numbers and symbols are printed on checks and deposits in the wrong position, the MICR line will not be read properly at the bank and these items will be rejected by the bank's reading and sorting process. Sometimes this can result in additional charges at the bank. If a large number of items are returned in statements with document jackets, you can probably assume a MICR line error is the cause. Users must be especially careful inputing this data.

Closing Bank Accounts

If a bank account has a zero balance and has been reconciled to a zero balance at the bank and has been closed for future activity, you can delete the bank account from the system. Before deleting, the user should verify the bank account is not shared by several clients.

Process Manual Transactions

This function is probably the most critical of the functions of the Bank Account System because it holds the greatest potential for an untrained user to create errors in the bank accounts. Errors can be reversed, but the corrections will be reflected on client reports. Ideally, only staff who are experienced will have access to this function.

Prepare Bank Reconciliation

The Banking module has an automated bank account reconciliation program. Generally, the user assigned to reconcile bank statements should have some experience with this task. In addition, it is a good idea to ensure the person person reconciling bank statements is not the same person with control over receivables (deposits) or payables (check writing). An independent reconciler will be able to spot any fraudulent activity in client bank accounts.

The user should also assume the transactions and balances reflected by the Bank Accounts are correct and the bank statements needs to be brought in line. In general, except for interest payments, any discrepancies will be discovered to be bank errors. The user responsible for reconciling statements should also be responsible for contacting the bank, requesting corrections and following up to ensure corrections are made.

The Bank Account System allows you to reconcile by creating footnotes. It is important to make journal entries for permanent corrections or adjustments (like the interest payments mentioned above), and to review footnotes periodically to ensure other adjustments are made by the bank.

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