How do Handle an Accounts Payable Check Reconciliation when a Transaction hits the Bank in a Month Prior to the Books?

This typically happens with automatic payroll. A year end payroll might be deducted from the foundation books in January, but paid out in December. To resolve issues in a check reconciliation where the bank transaction happens in an accounting period prior to the book transaction, the easiest way to handle it is to create two transactions in the check reconciliation transaction list that net to $0 for the amount of the real transaction. One side is then reconciled in the current month and the other is left unreconciled this month, but reconciled with the real transaction the following month.

For example, payroll was deducted from the bank on December 31st for $2000. This was a January payroll and was recorded the following year in January in the ledger. Create a positive $2000 and a negative $2000 transaction in the AP transaction screen. The easiest way to do this is create one side and then copy it and change the amount. So you would now have 3 transactions related to this event:

• December  -2000 reconciled date in December
• December +2000 reconciled date in January
• January      -2000 reconciled date in January   - the original entry

December nets to $0 on the books, but shows a -2000 for the bank.  January nets to $0 at the bank, but shows a -2000 in December.