The Bank Reconciliation

SOHK Bank Account Transactions & Accounting

The Bank Reconciliation Frequency: Every two weeks Each month, SOHK reconciles its bank accounts. This matches all financial transactions of the charity to a receipt or invoice, to show what we spent and received. This is an essential function for several reasons:

the prevention of fraud and for accountancy purposes by documenting that an account balance is correct.

to track fundraising and to follow up on overdue invoices from clients.

the creation of reports issued to trustees and programme leads to track spending for budgeting and forecasting purposes.

How to:

Download the SOHK bank statements from CAF for the Current, VAT, Delivery, Wales and Scotland accounts.

Pro tip: Download exports in OFX format.

On Xero go to the Dashboard and select the relevant bank account.

Pro tip: On the bank statements tab double check the date when the last bank statement was uploaded to ensure minimum duplication.

Under 'manage account' select import statement, select browse and find the relevant bank statement. See image 1.

Image 1

On importation, many of the bank lines should automatically reconcile with invoices issued and receipts for debits received. Double check dates and the amount, and any references on the invoices/payments. If correct, select OK to reconcile. If the automatic function has selected the incorrect invoice/receipt click 'find and match' and select the correct transaction. See Image 2.

Image 2

Credits such as donations from JustGiving etc. will not have a record to reconcile against. Here you will need to go to the relevant portal (please see the instructions at the end of this section) and download the report for the sum outlined. Then click 'create'>'add details' on the transaction in Xero and attach the report against the credit. See Image 3.

Image 3

Once the report has been uploaded, you need to amend the sum in the column 'unit price' to match the gross donation (i.e. the amount before the portal took out any payment or processing fees). Then code as required (e.g. individual income, no VAT, unrestricted, fundraising etc.)

Once you click OK you will be unable to reconcile as the net sum will not match the gross sum. See Image 4.

Image 4

To rectify this you will need to manually adjust the sum by adding the Bank Fee. Here complete the fields as outlined in Image 5. (e.g. To: JustGivinf, Description: Bank Fee, Account: Individual Income, VAT: No, Funds: Unrestricted, Programme: Fundraising) Under the amount insert the transaction fee. This should reconcile. Click reconcile. See Image 5.

Image 5

If you have received part payment of an invoice, to reconcile this sum click the match tab, select the invoice you wish to attribute the sum to then click 'split'. This will provide the option to reconcile the sum received against the outstanding invoice. See example Image 6.

Image 6

For other credits e.g. HMRC payments, cheques, cash sums: click 'create'>'add details', upload the statement/cheque picture/cash sheet against the credit and code as appropriate. Click reconcile.

Wages, are coded via the 'create' or tab, selecting 2220 - Net Wages. Ensure wages etc. are against the correct contact and record the month the wages refer to. See Image 7.

Image 7

Cash withdrawals from an ATM and internal transfers to other accounts are recorded under the 'Transfer' tab. Select 'Petty Cash' or the recipient account from the drop down (ee Image 8). Receipts for items purchased by Petty Cash are allocated using the same process. Select 'OK' to confirm.

Image 8

Once you have finished your reconciliation, you may have some debits outstanding. For these, download a reconciliation report (top right of each Bank Account page) and send to person who spent the money for them to identify their outstanding receipts. Once uploaded these will require approval in Xero before they will reconcile against the transactions.

Instructions for Donation PortalsStripe:
Go to https://dashboard.stripe.com/payouts and login
Click on the relevant transaction
Scroll down until you find a section called 'Transactions' and then click 'Export' (on the right hand side of the page, level with the word 'Transactions')GoCardless:
Go to https://manage.gocardless.com and login
Click on 'payouts' (left hand menu)
Click on the relevant transaction
Click 'Payout breakdown' in the top right of the screen and then 'Export'JustGiving:
Go to https://www.justgiving.com/charities/beta/account/login and login
Click 'Reports' in the top menu bar
Click 'Payment reports' under 'Finance'
For the relevant payment, click 'Invoice'Charity Checkout:
Go to https://app.charitycheckout.co.uk/login and login using the charity admin details (request these from the Finance Manager)
Go to Accounts> Payouts in the top menu bar
Click the magnifying glass on the far right hand side of the relevant transaction
Click 'Export' on the far right hand side of the screenCAF Donate:
Go to https://www.cafonline.org/system/login and login
Scroll down to 'View your reports' and click 'Payment reports'
Select one of Direct Giving or Payroll Giving (most of our transactions are Direct, but you may need to try both!)
Click 'Separate reports for each payment we make'
Select the relevant date range and click 'Search'
Click 'Summary Statement' to download it