Reconcile Collected Draft or Definite Postdated Check and Record Bank Deductions

This instruction explains how to use 'Bank Remittance. Reconcile Payment' (ARS350) to reconcile customer drafts that have been collected on the due date or discounted before the due date. At the same time you can record any bank fees and other bank deductions.

You can also use this instruction to reconcile definite postdated checks (type 1), since they are treated as payment class 4 documents in M3.

You base the reconciliation on the bank statement reporting that the amount is transferred to the company's account.

Outcome

The collected drafts are reconciled, that is, the payment is made and the customer risk is canceled. An accounting journal is printed.

Accounts receivable and general ledger are updated. The following account entries are created:

Accounting Rule

Account

Debit

Credit

AR75–196 or

AR75–197

Drafts remitted, collection or:

Drafts remitted, discount

x

Bank

x

Account defined in (ARS015)

Bank charge

x

AR80–211/212

VAT Receivable

x

The draft has remittance status 30 in 'Customer Draft. Display' (ARS280).

Before you start

  • A report on collected drafts must have been returned by the bank. See Remitting Customer Checks or Drafts to Bank for Collection.
  • FAM function AR86 for bank remittance reconciliation must be defined in (CRS405). This includes selecting whether an accounting string for account supplementation should be displayed in (ARS350/E), enabling you to enter additional accounting identities for the posting.
  • To be able to report bank fees, bank fee types must be created in 'Payment Received. Specify Bank Fee Type' (ARS015).

Follow these steps

  1. Start 'Bank Remittance. Reconcile Payment' (ARS350/B).

Review bank remittance before reconciling

  1. To begin by reviewing the drafts included in the original bank remittance, select option 11='Remitted payments' for the remittance on the B panel.

  2. On 'Bank Remittance. Update Payment' (ARS351/B), review the records, displayed by payer and due date. Return by pressing F3.

Reconcile drafts

  1. On (ARS350/B), select option Reconcile for the bank remittance.

  2. On the E panel, change the proposed remittance date, if necessary. Optionally, specify a voucher text.

  3. If the drafts were drawn in foreign currencies, change also the proposed exchange rate, if necessary.

    Any difference between the exchange rate used by the bank and the rate the drafts are recorded at is automatically calculated.

  4. To record any bank fees and deducted interest due to discount before the due date, select the Bank fee check box. Press Enter.

  5. Select one of these alternatives:

    • If you selected the Bank fee check box, continue with step 6.
    • If not, continue with step 8.

  6. On the F panel, specify the deductions in the displayed bank fee fields and the VAT field, when displayed.

  7. Adjust the proposed VAT code for each field, when relevant. Press Enter.

    The two fields in the bottom of the panel are automatically updated: 'Total charges' deducted from the 'Total bank reconciliation amount'.

  8. Press F3 to return to (ARS350) and create a voucher.

  9. If the Bank fee check box was not selected in step 3, press Enter to create the voucher.

Related topics