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Perform Reconciliation

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Contents

Introduction

Reconciliation is the accounting practice of comparing two sets of financial records to ensure that they are accurate and consistent. Essentially, when you reconcile an account, you validate whether its current balance is correct and identical everywhere. If you are not familiar with reconciliation, we recommend this article, published by one of our supported payment processors: Stripe.

Terminology

Let’s explore some of the terms we will be using throughout this guide:

Reconciliation

Reconciliation is the process of comparing external financial records (such as bank statements, general ledger accounts, or invoices) with internal accounting records to ensure they match and are accurate. The goal is to identify and resolve discrepancies, thus preventing errors, fraud, or financial misstatements.

Beginning Balance

The Beginning Balance is the account balance or the total transaction amount that has already been reconciled and that you start from when reconciling. In ChMeetings, the Beginning Balance for your entire account is automatically calculated as the total of all previously reconciled transactions in the bank account. If this is the first reconciliation, the balance will be 0. This value cannot be manually edited.

Ending Balance

The Ending Balance is the account balance shown on the bank statement for the reconciled period or the total transaction amount during the period that you want to reconcile. ChMeetings automatically calculates this value. To be able to reconcile, the Ending Balance on your external document must be equal to the value calculated by ChMeetings. This value cannot be edited manually.

Total Transaction Amount

The Total Transaction Amount refers to the sum of all transaction amounts during a specific period or corresponding to selected transactions. For example, if you are reconciling an entire account, the Total Transaction Amount is the sum of all transactions performed during the reconciled period. If you are selecting specific transactions to reconcile, the total is the sum of the amounts in those selected transactions. 

Cleared (Transaction Status)

Cleared means that the transaction has gone through the bank, but has not yet been reconciled in ChMeetings. When you import your transactions from your bank into ChMeetings, they are automatically marked as Cleared.

Reconciled / Unreconciled (Transaction Status)

Reconciled means that the transaction has been matched and confirmed against your bank records during the reconciliation process.

Unreconciled means that the transaction has not yet been matched during reconciliation.

 

Why Is Reconciliation Important?

Reconciliation helps your church maintain accurate accounting. It ensures that your records are the same at your bank and in your accounting, no matter your methods or the systems you use. It is a well-recognized practice that helps mitigate errors and accurately manage an organizations’ finances. 

As a church, it is key to perform reconciliation regularly. It helps make sure that financial resources are well managed, reporting is accurate, and financial transparency is easier, particularly since most funding comes from giving. 

Reconciliation is not mandatory, but if accounting errors occur, you may spend more time fixing them than performing reconciliation. Long periods of unreconciled record-keeping increases the risk of financial mismanagement.

 

Recommendations 

During reconciliation, we recommend that you validate all unreconciled transactions on the account you’re working with. This means reviewing and potentially adjusting existing transactions so that your ChMeetings transactions exactly match your bank statement or financial report you use to reconcile. Please see Manage Accounts (in particular, the sections: Add Transactions and Work with Your Account Transactions List) for more about working with Transactions in ChMeetings Accounting. Once validating your transactions, you may proceed to reconcile the account.

We recommend that you perform reconciliation on a monthly basis. 

Additionally, it’s important to have your bank statement or an equivalent financial report on hand to ensure a smooth process. It should include the following information: 

  1. The opening balance at the beginning of the month you’re reconciling;

  2. Income transactions within the month: e.g.: deposits, any amounts with which your account was credited.

  3. Expense transactions within the month: e.g. withdrawals or payments made from the account; any amounts with which your account was debited.

  4. Any applicable interest income or bank fees. 

  5. The ending balance for the month. 

 

Initiate Reconciliation

You can reconcile your accounts within ChMeetings by going to Accounting > Reconciliation. Here is where you will find a list of all your existing Accounts, along with their current balances. 

Click the desired account to reveal the number of new transactions since the last reconciliation; as well as the Reconcile button.

Click Reconcile to continue.

 

Alternatively, you can access the Reconciliation feature directly from the Account you want to reconcile (under Accounting > Accounts > Select Account). Click Reconcile to proceed.


 

In the Reconcile window, go through the following:

  • Beginning Balance, which comes from, in this order:

    • The ending balance of the account's last reconciled statement. The dialog then says "Carried forward from your last reconciled statement."

    • If the account has never been reconciled: the account's own beginning balance (the Starting Balance in Edit Financial Account), when its start date is on or before the ending date.

    • Otherwise $0.00.

  • Ending Balance Date: The last date of your reconciliation period; for example, 01/31/2025. The ending date must be after the last reconciled statement's date. Earlier dates cannot be picked.

  • Ending Balance Amount: The ending account balance shown on the bank statement for the reconciled period. 

    • To reconcile an entire account, the ending balance from your bank statement must be the same as your ChMeetings account balance. This means that the Ending Balance must be equal to the Beginning Balance plus the total transaction amount during the reconciled period. 

    • To reconcile specific transactions, then the ending balance from your bank statement should be the same as the total amount of those transactions within ChMeetings.

 

Notifications on an Account's First Reconciliation

When an account is reconciled for the first time and the Beginning Balance is $0.00, a blue information box explains why. There are two versions. Neither one blocks your ability to reconcile, because some accounts really do start at $0.00. The notifications do not appear once the account has a reconciled statement.

The Account Has No Beginning Balance

The notification gives the date of the account's earliest transaction and says that everything from that date to the ending date will be included. If the account had money in it before that date, then you should add it as the account's beginning balance first. 

Click Set beginning balance to open the Edit Financial Account window, where you can enter the Start Date and the Starting Balance for each Fund.

 

The Beginning Balance Is Dated After the Statement

If the account has a beginning balance but its start date is after the chosen ending date, that balance is not counted and the statement starts from $0.00. For this scenario, click Review beginning balance and open the Edit Financial Account dialog to adjust your balances per fund.

 

The Reconciliation Process

Click Continue in the Reconcile window when you are ready to proceed.

After Continue, the reconciliation screen lists the account's unreconciled transactions up to the ending date. The summary at the top shows Statement Balance, Account Balance (the beginning balance plus the ticked transactions), Beginning Balance, and Difference when the two balances do not match.

 

Select Transactions

Here are some features you can use on this screen to make your transaction selection process easier:

  • Use the All / Income / Expenses switch to see all transactions or only show deposits or only payments, to make it easier to check them against the bank statement.
  • Ticked transactions are kept. A transaction stays ticked when you switch between All, Income and Expenses, and when moving between pages. The count on the buttons and the Account Balance always cover the whole statement, not only the rows shown.
  • Oldest first. Transactions are listed from oldest to newest, like a bank statement. Click the Date column header to reverse the order.
  • The account's beginning balance is not listed as a row. It is already included in the Beginning Balance figure.
  • Tools stay available. Add Transaction, Import Transactions, Manage Rules and each row's menu, including Void, remain on screen even when the difference is $0.00.
  • Buttons are always visible. The page fits the window and only the list scrolls, so Cancel, Save for Later and Reconcile and the page numbers stay on screen for a long statement.


 

Correct Reconciliation Differences

There are two scenarios that may occur at this point: either your Ending Balance in ChMeetings is different from your external document Ending Balance (in which case the Reconcile button is inactive), or it is the same (this time the button is active). If it is different, you must correct the differences. If the amounts are the same, then you can proceed to reconciliation.

If the Reconcile button is inactive, either there is no transaction selected or your ending balance and total transactions amount are not equal. In this case, the selected transactions will not reconcile so you cannot complete the process. 

At this stage you must compare your ChMeetings transactions with the statement or records you’re using for reconciliation, and ensure that all transactions are accurate and amount to the same total balance. From the dedicated screen in ChMeetings, you can resolve this issue through one of the following methods:

 

Save For Later

The Save For Later option at the bottom of your reconciliation transactions list lets you save any changes you made to the reconciliation process and resume later, from where you left off. 

Save for Later keeps the ending date, the statement amount and the ticked transactions. When a saved reconciliation exists, the account page button reads Resume Reconciliation. Clicking it opens the Reconcile dialog with the saved ending date and amount already filled in. After Continue, the transactions you already selected are restored.

If you move the ending date earlier than the saved one, selected transactions dated after the new ending date are dropped from the selection.

 

Complete Reconciliation

When there is no difference between your ending balance and the total transaction amount, then the Reconcile button at the bottom right will be active. If so, then click it to complete the process.

 

Once done, you will be taken back to the main Reconciliation section. Here is where you can reconcile any remaining transactions on your accounts, view reconciled transactions, or undo a reconciliation.

 

In your Accounts section, reconciled transactions will be shown with a Reconciled status and will no longer be editable. To edit such a transaction, you must undo the reconciliation. See below for details. 

 

View Reconciled Transactions

You can view reconciled transactions from the main Reconciliation screen, by selecting the desired account, then clicking View.

 

Clicking View will show you the list of all reconciled transactions and balances corresponding to the Account you’re working with. You can export these transactions if you need to.

 

Undo Reconciliation

You can unreconcile transactions by clicking the Undo button corresponding to the respective reconciliation. 

You must confirm your choice. Before you do, keep in mind that this will affect all transactions that were reconciled as part of the operation you selected to undo. So all transactions reconciled within the selected period will become unreconciled again and you must go through another reconciliation process.

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