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• Bank reconciliation basics
• Reconcile matched transactions
• Find and reconcile transactions
• Add transactions
• Ignore transactions

Bank reconciliation basics

Whether bank account transactions are auto-downloaded or imported manually, the process of reconciliation is the same.

Follow these steps to perform bank reconciliation:

1. In Flare's main menu, click Bank, select a book account from the account dropdown menu (1 and 2 below), and click the account name (3). The account is displayed.
   
   
   
   In this example, we'll select the book Checking account.
   
   
2. View the reconciliation status of the Checking account. Compare the bank Checking account to the book Checking account.
   
   

   Reconciliation status key

1. Bank balance and reconciliation status – the total balance of all account transactions downloaded from your bank and the reconciliation status (in this case 1 transaction is unreconciled).
   
   
2. Book balance and reconciliation status – the total balance of all account transactions recorded to your book accounts (the financial accounts you've created in Flare) and the reconciliation status (in this case 1 transaction is unreconciled).
   
   
3. Reconcile button – click this when there are unreconciled transactions (either in bank or book accounts).
   
   
4. A book account transaction (in this example, a payment made to Checking).
   
   
5. The transaction reconciliation status of a book Checking account transaction. "U" means unreconciled and "R" means reconciled.
   
   
3. Take a reconciliation action: Match, find match, add new, or ignore bank transactions.
   

Reconcile matched transactions

Assumptions: you've recorded a payment (an invoice, bill or other deposit or check) in a book account. When bank transactions are auto-downloaded or imported manually, a match is auto-suggested.

Do the following to match a transaction:

1. Click Bank in Flare's main menu, click the account dropdown menu and select a book account (1, 2, and 3 below). In this example, we are selecting the book Checking account.
   
   
   
   
2. Click the Reconcile button (4 below). Flare will display bank transactions on the left and on the right will auto-suggest book transactions that may be a match.
   
   
   
   
3. If the bank and book transaction are a match, click the Match button (5 below). The bank and book transactions are now reconciled.
   
   
   
   
4. If the book transaction presented as a possible match is not a match or no book transactions are suggested but you know they exist in your Flare book account, click the dropdown arrow on the right of the Match button and select Find Match. See Find match.

Find a match and reconcile

Assumptions: you've recorded a payment or payments (an invoice, bill, or other deposit or check) to a book account. When bank transactions are auto-downloaded or imported manually, you recognize a bank transaction that you want to match, but a match is not suggested.

To find a match in a Flare book account, do the following:

1. Click Bank in Flare's main menu, click the account dropdown menu and select a book account (1, 2 and 3 below). In this example, we are selecting the book Checking account.
   
   
   
   
2. Click the Reconcile button (4 below).
   
   
   
   
3. Find the bank transaction you'd like to match. First, sort by clicking the Status column heading to bring unreconciled transactions to the top (5 below).
   
   
   
   When you find the transaction, click the dropdown arrow at the right of the Add New button (6 above) and click Find Match (7). A window will open.
   
   
   
   In this example we are trying to find a match in our book Checking account for a $300 bank transaction (a deposit). A common scenario is that a customer sends one check to make a payment against several invoices you've issued.
   
   
4. Select the matching book transaction or transactions (8 below).
   
   
   
   In this example, we are selecting 3 separate payments we've recorded to our Flare Checking account. They are from the same customer and total $300 – matching the payment that is in our bank transactions.
   
   
5. Click the Select button (9 above). Flare matches the three $100 book Checking deposits to the $300 bank transaction.
   
   A single payment in our bank transactions has been matched to 3 separate deposits previously recorded to our book Checking account.

Add new transactions

Assumptions: You haven't recorded the payment of an invoice or bill (or other deposit or check) to a book account. When bank transactions are auto-downloaded or imported manually, you recognize a transaction in the bank statement and want to record it to the book account.

To add a bank transaction to a Flare book account, do the following:

1. Click Bank in Flare's main menu, click the account dropdown menu and select a book account (1 , 2 and 3 below). In this example, we are selecting the book Checking account.
   
   
   
   
2. Click the Reconcile button (4 below).
   
   
   
   
3. Flare displays bank transactions on the left and book transactions on the right. When a match is not found in your book account, an Add New button is displayed (5 below).
   
   
   
4. Click Add New (5) to add the transaction to the book account. In the example below, we are adding a deposit for a payment made by a customer.
   
   
   
   Flare simultaneously adds the transaction to the Book account and matches it with the Bank transaction. Notice that the book account balance has been updated (A below), the book transaction's reconciliation status has changed to "R" meaning reconciled (B), and the book transaction is uncategorized (C).
   
   
   
   
5. Close the reconciliation window by clicking the close button (6 above). Now you can categorize the book transaction to an appropriate chart of accounts category.
   
   
6. Find the transaction in the book account's transaction list and click the edit icon (pencil) to the right of Uncategorized in the Amount/Category field (7 below).
   
   
   
   
7. Categorize the transaction to an appropriate chart of accounts category. In this example of a payment a customer made on an invoice, we select the customer from the Name field (8 below) then select Accounts Receivable as our category (9) and click the button to confirm the selection.
   
   

Ignore transactions

Assumptions: A bank transactions file is auto-downloaded or manually imported and you see a transaction in the bank that is not a business transaction. You don't want it to be part of the bank transactions balance and you don't want it to be present in the book account.

To ignore a transaction do the following:

1. Click Bank in Flare's main menu, click the account dropdown menu, and select a book account (1, 2 and 3 below). In this example, we are selecting the book Checking account.
   
   
   
   
2. Click the Reconcile button (4 below).
   
   
   
   
3. Find the transaction on the Bank side of the reconciliation view.
   
   
     Notice that the bank transaction we want to ignore is added or subtracted from Bank until it is ignored (A below). In this case, a $433 check for a non-business purchase (a Bolex watch) has been subtracted from the bank balance when the transactions file was auto-downloaded or imported. Our bank and book balances are unreconciled and the difference between book and bank (our 1 unreconciled bank transaction) is displayed (B).
   
   
   
4. Click the dropdown arrow to the right of the Add New button (5 below) and click Ignore (6).
   
   
   
   The bank transaction is ignored. The $433 check is added back to Bank (C below). Reconciliation status changes to "Reconciled" (D) and the status of the bank Checking transaction is set to "I" meaning "Ignored" (E).
   
   
   

Learn about batch reconciliation.