What is bank reconciliation?
The bank reconciliation compares the money transactions that appear in your bank account with those you have registered in your accounting system. The objective is to ensure that everything matches and that there are no errors, oversights, or incorrect transactions.
It is a fundamental step to keep accurate accounting and avoid problems with taxes or with your business. In addition, by doing so, you can quickly detect errors or even fraud.
Why is it so important to do a bank reconciliation?
Performing a bank reconciliation is essential for several reasons:
Verify that everything matches: it ensures that there are no errors in your accounts.
Avoid surprises: it helps you detect transactions that you do not recognize or that may be incorrect.
Comply with tax regulations: if everything is well reconciled, it is easier to comply with tax and accounting obligations.
Make informed decisions: when you know how your money is doing, you can make better decisions for your business.
At Holded, we help you make this process much easier and faster.
How to do bank reconciliation in Holded
In Holded, you can perform bank reconciliation by following these simple steps:
Link your account
The first thing you need to do is to connect your bank account to Holded. This will automatically import all the transactions of your account, which saves you time.
Review the bank transactions
Once your account is connected, you will be able to see all the transactions that have been made in your bank account, such as payments and collections.
Reconcile the transactions
This is where the reconciliation starts. You have to compare each bank transaction with your company's documents (such as invoices, payments or collections) to make sure everything is correct.
Use automatic reconciliation rules and suggestions
To make it even easier, Holded offers you automatic rules that can help you reconcile repetitive or similar transactions (e.g. payments for your subscriptions). It will also show you suggestions so you can get the job done faster.
Generate a report
Once you have reconciled the transactions, you have different options to generate reports and keep a clear record of your bank reconciliation:
From Treasury > Accounts: by downloading the statement of transactions, within a specific account, you will be able to generate an Excel file where you will see all the reconciled transactions.
From Treasury > Payments: you can sort the list by "Reconciled", and export the data to an Excel file.
The reconciliation window
The reconciliation window shows, on the left, the synchronized or imported bank transactions, and on the right, the existing documents in Holded. To access:
Go to Treasury > Accounts.
Select the account where the transaction is.
Click on Reconcile in the upper right corner.
The window is divided into two sections:
1. Transactions List (left)
Displays synchronized or imported bank transactions. Its columns include:
Date: day of the transaction.
Description: concept assigned by the bank.
Progress: reconciliation percentage (100%, 50%, etc.).
Amount: the amount of the transaction.
To the right of each transaction, you will find the three dots button, with three options:
Notes: add comments to identify the transaction.
Mark: highlight it to facilitate its follow-up.
Delete: delete unconsolidated or erroneous transactions.
At the top, you can filter by status (Pending, Reconciled, Reconciliation Rules, Reconciliation Suggestions, Flagged, All) and by date (current year, previous year, last 7 days, etc.). You will also find the Find Suggestions button.
2. Documents in Holded (right)
Shows the existing documents in Holded, with filters by:
Type of document: invoices, tickets, payroll, collections, payments, etc.
Date: set the time range.
Search 🔍: find specific documents.
At the bottom, you will see two options to reconcile transactions that do not have an associated document on Holded or that need new information. That is, you can create the document or transfer directly from the reconciliation:
Transfer: move the amount to another accounting account, create a payment or an accounting entry.
New document: generate a purchase, sale, or a purchase/sale ticket.
Reconciliation tools in Holded
Reconciliation rules: you can create rules so that repetitive transactions are automatically reconciled, for example monthly payments. Activate the free gem Reconciliation rules now, and let Holded detect and reconcile these transactions for you.
Automatic suggestions: Holded suggests which transactions can be reconciled automatically, so you don't have to do everything manually.
Manual reconciliation: if a transaction cannot be reconciled automatically, you can do it manually by linking the correct documents, such as invoices or payments.
Bank reconciliation is a key process to keep your finances up to date and error-free. Start linking your bank account today and optimize your accounting.