Reconciling payroll and remittance payments correctly is crucial to keep your accounting records aligned with the actual transactions in your bank account. This will allow you to ensure that your payments are properly reflected in your financial reports and avoid possible errors or duplicates in your accounting records.
Here's how to reconcile payroll and remittance payments, depending on the situation.
Payroll Payment Reconciliation
Payroll reconciliation allows you to ensure that payments to your employees are correctly reflected in your accounting records. To do this:
Go to Treasury > Accounts.
Select the account where you want to reconcile the payment and click Reconcile in the upper right corner.
In the list, filter by “Pending”, sort by date, and check the box of the corresponding transaction (in this case, “Payroll April” of -3000€).
In the list of documents, on the right, filter by “Payrolls”. All the payrolls that you have entered in Holded from Purchases > Payrolls, and that are still pending payment, will appear.
Check the box to the left of the corresponding payroll.
Click Reconcile at the bottom right.
This process not only relates the bank transaction to the payroll, but also changes the payroll status to “Paid”, generating the payment transaction and its corresponding accounting entry.
Remittance Payment Reconciliation
Imagine you receive a remittance payment from your customers or suppliers, how do you make sure that the collection is properly recorded and related to the corresponding invoices?
First of all, make sure you have previously entered the remittance in Holded from Treasury > Remittances.
Reconciliation of remittance payments with the status “Pending”.
Go to Treasury > Accounts.
Select the account where you want to reconcile the payment, and click Reconcile in the upper right corner.
In the list, filter by “Pending”, sort by date, and check the box to the left of the corresponding transaction (in this case, “April remittance” of +5205€).
In the list of documents, on the right, filter by “Remittances”.
☝🏼 For the remittance to appear in this list, it must be in “Pending” status. If the remittance is completed, it will not appear under this filter.
Check the box to the left of the remittance you wish to reconcile.
Click Reconcile at the bottom right.
Upon reconciliation, a collection transaction will be generated on each of the invoices associated with the remittance, for the corresponding amount.
Reconciliation with remittance status to “Completed”.
To mark a remittance as completed, follow these steps:
Access Treasury > Remittances.
Select the remittance you want to reconcile.
In the “General” section, use the drop-down menu to change the status of the remittance to “Completed”.
Once you mark the remittance as completed, all attachments will automatically be marked as paid. In addition, a payment for the amount of the remittance will be generated on each corresponding invoice and a journal entry will be recorded.
Next, to reconcile from the bank statement, since the invoices are paid upon completion of the remittance, you will need to reconcile against the payment (or collection, depending on the type of remittance). Follow these steps:
Go to Treasury > Accounts.
Select the account where the payment or collection is reflected and click Reconcile in the upper right corner.
In the transaction list, filter by “Pending”, sort by date, and check the box of the corresponding transaction.
In the list of documents, on the right, filter by “Payment” or “Collection”, depending on whether the remittance is a payment or a collection.
Check the box of the corresponding transaction and click Reconcile.
When the reconciliation is completed, the documents associated with the remittance will be marked as paid and the transaction will be automatically recorded in the accounting.
☝🏼 Remember that you can filter the reconciled transactions from the bank statement and click on a specific one to see the documents with which it has been reconciled. The details will appear on the right, and from there you can access each document for more information.
Recording of accounting entries when reconciling remittances
When you reconcile a remittance with several documents in Holded, you can choose how you want the accounting entries to be recorded:
Create an accounting entry for each related document (default option): this option generates an accounting entry for each document, which provides greater detail and traceability in accounting, facilitating the breakdown of information.
Create a single journal entry that groups all documents in a single transaction: this option reduces the number of accounting records, simplifying the management of your accounting. By grouping everything in a single entry, it facilitates the reconciliation of the remittance and improves alignment with the bank, avoiding possible mismatches.
If you prefer a more simplified accounting aligned with bank transactions, you can activate the second option in the settings:
Go to the menu (top left corner) and select Settings.
Click Accounting, then Preferences.
Scroll down to the Reconciliation section, and check the box "Create a single journal entry for each bank statement transaction".
Using the dropdown, select the account where the remaining amount will be allocated when it is not possible to reconcile the entire transaction with the remittance (by default, for Spain, it is Account 55500000: Items pending application).
Finally, click on Save at the top right.
☝🏼 This setting will only apply to remittances that have not yet been reconciled.