Does your bank book or cash book not match the accounting records or your paper statement? Want to understand how these two outputs work? We'll show you how to avoid common issues.
The bank book and cash book are standard features of ABRA Flexi. They are one of the ways to obtain account balances for a bank account or cash register for reconciliation against accounting records or paper statements.
When a company uses tax-basis accounting (daňová evidence), the books behave differently than in double-entry bookkeeping. In the wizard, you can set several parameters: the bank account or cash register, and the date range — from which issue date (hereinafter date from) to which issue date (hereinafter date to) you want the book to cover.
Tax-basis accounting or no account assigned to the bank account/cash register
If the company uses tax-basis accounting, both books behave in the same way. The same behavior applies in double-entry bookkeeping when the bank account field (for a bank account) or the cash account field (for a cash register) is not filled in. Both of these fields are always located on the Accounting tab of the respective record.
How does ABRA Flexi calculate the opening balance for the bank book?
The opening balance of the bank book in tax-basis accounting is calculated by ABRA Flexi summing all non-cancelled incoming bank documents with an issue date earlier than the selected date from that are linked to the selected bank account.
From this amount, all non-cancelled outgoing bank documents with an issue date earlier than the selected date from that are linked to the selected bank account are subtracted.
The resulting figure is then used as the opening balance. Non-cancelled documents within the monitored period (between date from and date to) that are linked to the selected bank account are then added to this balance.
How does ABRA Flexi calculate the opening balance for the cash book?
In the cash book, ABRA Flexi uses two opening balances: one for cash payments and one for card payments.
Both are calculated similarly to the opening balance in the bank book, but an additional filter is applied for the payment method. If a document has the payment method set to Card, it is included in the opening balance for card payments. If any other payment method is set on the document, or if this field is empty, the document is counted toward the cash opening balance.
These figures are used as the opening balances. Non-cancelled documents linked to the selected cash register and falling within the chosen period are then added to them, just as with the bank book.
Double-entry bookkeeping with an analytical account assigned to the bank account/cash register
If a bank account has a bank account ledger code assigned, or a cash register has a cash account ledger code assigned, the calculations work differently. In this case, ABRA Flexi also takes into account the opening balance from the accounting records during the calculation. However, this is the only point at which the bank book or cash book has any connection to the accounting records.
How does Flexi incorporate the opening balance from the accounting records?
The bank account ledger code is retrieved from the bank account, or the cash account ledger code is retrieved from the cash register. This is an analytical account from the chart of accounts (bank account 221xxx or cash register 211xxx). The currency is also retrieved from the bank account or cash register (if not filled in, the Home Currency from the company settings is used).
In the next step, ABRA Flexi attempts to find the first preceding open accounting period relative to the date from. If no such accounting period is found, it uses the accounting period that contains the date from.
At this point, ABRA Flexi has identified the analytical account, currency, and accounting period, and can retrieve the opening balance (from the accounting records). The opening balance at the start of the accounting period is calculated as Debit opening balance minus Credit opening balance. For the cash register, this figure is used as the opening balance for cash. The opening balance for card payments is 0.
This gives us the opening balance at the start of the accounting period. ABRA Flexi then adds all non-cancelled incoming documents with an issue date falling between the start of the accounting period and the date from. All non-cancelled outgoing documents within the same time range are subtracted.
ABRA Flexi thus obtains the opening balance for the bank book.
For the cash register, when adding and subtracting documents, the payment method is again taken into account in the same way as in tax-basis accounting.
Common issues
The bank/cash book in tax-basis accounting rarely causes problems. However, in double-entry bookkeeping, figures may occasionally not match the accounting records or paper statements. There are several possible explanations for such discrepancies:
The bank or cash book can also be thrown off by single-document money transfers between one bank account or cash register and another. In ABRA Flexi, you can enter a document that has account 221001 on the debit side and account 221002 on the credit side, but this document will only be counted in the bank book for the bank account set in the document header. Note — that bank account does not even need to have either analytical account assigned to it!
Solution: Money transfers should be made via a transit account (money in transit) — two separate documents are required.In most cases, documents other than bank documents (for the bank book) or cash register documents (for the cash book) are not taken into account. Analysis very often reveals a user error where a document posted to an analytical account from the cash register or bank account was entered under internal documents. However, such documents are only reflected in the bank/cash book if their posting date falls before the first preceding open accounting period.
Solution: All corrections should be made directly in the bank or cash register records, not in internal documents.Another reason why opening balances may occasionally not match is the use of the same analytical account on two different bank accounts or cash registers. When calculating the opening balance, the accounting opening balance is then added to both bank accounts or cash registers.
Solution: Use separate analytical accounts for all bank accounts and cash registers.If opening balances do not match, closing balances will most likely not match either.
Solution: Review and resolve all of the preceding issues as applicable.