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Moving Away from GP Bank Rec

  • 1.  Moving Away from GP Bank Rec

    Posted 26 days ago
    Hi, we are in the final stages in implementing a 3rd party tool that will be a replacement for doing bank reconciliations in GP. However, before we make the switch I want to make sure we are considering the consequences of our actions. Our plan is to stop doing work in GP's checkbook, making adjustments using GL entries instead, and stop all Bank Recs. Our new reconciliation tool pulls directly from the GL, so in our minds, there's no reason to go the extra step of posting transactions to the checkbook.

    We do have a couple of SQL queries that pull checkbook data, so we are looking at how to restructure those or what's the minimal amount of extra work that has to be done in the checkbook to keep those accurate.

    So, my questions are: What are we missing? Are there any risks to not using the GP Checkbook or Bank Rec functions? Is there a clear path back to GP Bank Recs down the road?

    Thanks!

    ------------------------------
    Alan Strutz
    Divisional Controller
    Sugar Mountain Food Brands
    Seattle WA
    ------------------------------
    Academy - Online Interactive Learning from Experts


  • 2.  RE: Moving Away from GP Bank Rec

    TOP CONTRIBUTOR
    Posted 26 days ago
    Hi @Alan Strutz,

    There are several things I would recommend considering if you're moving away from the GP checkbook.

    1.) Proving Cash GL is accurate - presumably the third party tool will have a process within it to tie the cash GL?

    2.) Receiving Cash - if you use the sales/receivable modules you will still need to record cash receipts to hit the subledger and GL.  This will impact your GP checkbook, but you don't necessarily care about that.  You just mentioned using the GL only for cash adjustments so I wanted to put this out there.

    3.) Sending Payments - if you're using the payables subledger you'll still need to enter payments of some kind (checks, ACH's, etc.) to offset the payables and update GL.  Again you don't care about the GP checkbook side, but you want to make sure you alleviate your subledger as well as the GL.

    4.) Outstanding Checks and Outstanding Deposits - with not using the GP checkbook, you will need some mechanism either through GP (i.e. a SmartList or two) or through the 3rd party system to identify and reconcile outstanding checks and outstanding deposits/deposits in transit.  If your 3rd party system just pulls straight from the GL, you won't tie to your bank statement without factoring these in.

    5.) General Cash Reporting - you mentioned SQL queries, but what are your daily cash balance inquiry needs?  The GP reconciliation process lets you reconcile daily if you choose so you can get an accurate cash balance at any time in GP.  This can be helpful for those accountants who don't have access to the bank.  Is there some way in your 3rd party tool to do this?


    On the topic of clear path back to the GP checkbook, the answer is....maybe...kind of.  Several items to consider here as well.

    1.) GL entries - you mentioned doing adjustments to cash directly in the GL.  This will make it difficult to "return" to the GP bank recs down the road as your checkbook will never see those GL adjustments.  You'd have to get your checkbook balance to account for all the GL entries made since you went off the GP bank recs.  This could likely be done as one big increase/decrease adjustment where the debit and credit are both to cash  so there's no GL impact.  That would also let you add notes to the transaction about why you're doing the entry for reference down the road.

    2.) Missed Reconciliations - if you use this 3rd party tool for say 2 years, then that's 2 years of bank recs missed in GP.  You don't necessarily have to do 24 bank recs, but you'd have to do one large bank reconciliation to bring it up to speed.  That could be painful depending how long you use the 3rd party option and how complicated your bank recs are.


    There may be other things to keep in mind, but those are some of the big ones that come to mind at the moment.

    Does that make sense?

    Thanks,

    Samantha

    ------------------------------
    Samantha Higdon ,CPA,CGMA
    Consultant
    Lagom, LLC
    Carmel IN
    ------------------------------

    Academy - Online Interactive Learning from Experts


  • 3.  RE: Moving Away from GP Bank Rec

    Posted 26 days ago
    Hi Samantha,

    Thank you for your comment. A couple of items from our end. We do use full AR/AP in GP and plan on continuing each of those process as they exist now, including posting cash receipts and payments. Our 3rd party application is Blackline. We are moving our bank rec process to their platform, so we can use their matching engine instead of having to do the matching manually. This will allow us to tie out GL cash balances to the bank each period. So, really, the only processes going away are GP Bank Recs and Bank Increase/Decrease adjustments, which we want to do with GL entries.

    We also utilize a separate Excel file to calculate daily cash balances. This does pull a list of all unreconciled checks from the checkbook tables, so it's already on my radar to either get this data from Blackline or do just a check reconciliation in GP.

    Good call on the historical Increase/Decrease adjustments if we ever go back to GP for Bank Recs. It's definitely something we'll need to consider. We are all too familiar with doing a bank adjustment to the same GL account, which is part of the reason we want to move away from those types of transactions.

    Regarding Bank Deposits, do we need to process these after posting the cash receipt or can they just sit open? We might also take the opportunity to look at the auto-posting of bank deposits in GP in order to not have a backlog of receipts while not adding any additional steps.

    You comments give me some confidence that we're not missing anything major as we work through this transition. They are greatly appreciated!

    ------------------------------
    Alan Strutz
    Assistant Controller
    Sugar Mountain
    Seattle WA
    ------------------------------

    Academy - Online Interactive Learning from Experts


  • 4.  RE: Moving Away from GP Bank Rec

    TOP CONTRIBUTOR
    Posted 24 days ago
    Hi Alan,

    Happy to help where I can!

    Technically, no, you don't have to deposit those cash receipts into the checkbook.  The auto deposit is a good alternative to leaving them out undeposited for a couple of reasons:
    1.) If you return to the GP checkbook reconciliations in GP, you'll have to clean up the undeposited cash receipts before you start working actively using the GP checkbooks again.
    2.) Similar to the check issue you mentioned, your excel file that calculates daily cash balance will be impacted by the presence or absence of those deposits being made.


    There are a few items to consider with the auto deposit though...just to make sure you're aware of them:
    1.) If you post transactions individually (i.e. not in a batch), the way they hit the GP checkbook may not match the way they hit your bank statement.  Again not a huge issue for your since you'll be relying on blackline.

    2.) Deposit date - when you post deposits and use the auto deposit feature, it will use the transaction date/batch date to  update the checkbook which may or may not reflect when the actual deposit is made in real life (or when the money actually settles)-usually only an issue if you use electronic bank reconcile for deposits or if you cross periods.  Again not a big deal since you'll be relying on blackline.  More of an FYI on the functionality.


    There is one piece that did occur to me as I was writing this out....when you post to the GL are you creating a Journal Entry per Transaction or per batch?  Depending how Blackline pulls your data, you may want to review this.

    By Batch will give you 1 lump sum hit to Cash  while By Journal Entry will give you multiple hits (one per transaction).  Either option may be "good" or "less good" depending on how Blackline pulls the data and how your bank statements appear (i.e. are EFT's for the day individual or one lump sum on statement, are deposits individual or lump sum, etc.).

    If I  think of anything else, I'll respond here, and if you have any questions, just let me know.

    Thanks,

    Samantha


    ------------------------------
    Samantha Higdon ,CPA,CGMA
    Consultant
    Lagom, LLC
    Carmel IN
    ------------------------------

    Academy - Online Interactive Learning from Experts


  • 5.  RE: Moving Away from GP Bank Rec

    Posted 23 days ago
    Thanks Samantha! We are aware of the batch versus transaction posting implications. Our preference is post everything at the JE level because we can do group matching in Blackline, among other reasons.

    Sounds good. Again, really appreciate your time and assistance. Have a good week.

    ------------------------------
    Alan Strutz
    Divisional Controller
    Sugar Mountain Food Brands
    Seattle WA
    ------------------------------

    Academy - Online Interactive Learning from Experts


  • 6.  RE: Moving Away from GP Bank Rec

    SILVER CONTRIBUTOR
    Posted 23 days ago
    Alan:

    We use the GP Bank Rec and our bank has a file that we can download that will auto the deposits and outstanding checks so we do not have to do that process manually.  I do not know if that is the only reason you are going to the third party tool.  Thanks Drew Rosen

    ------------------------------
    Drew Rosen
    Carolina Services of Fayetteville, Inc
    fayetteville NC
    ------------------------------

    Academy - Online Interactive Learning from Experts


  • 7.  RE: Moving Away from GP Bank Rec

    Posted 23 days ago
    Drew, what kind of file do you get from your bank? Do you import it with Integration Manager or a different process? I've never heard of this and feel like it'd be good to tuck away in my library of GP knowledge. Thanks!

    ------------------------------
    Alan Strutz
    Assistant Controller
    Sugar Mountain Food Brands
    Seattle WA
    ------------------------------

    Academy - Online Interactive Learning from Experts


  • 8.  RE: Moving Away from GP Bank Rec

    GOLD CONTRIBUTOR
    Posted 22 days ago
    I realize it's probably too late but I thought I would mention this. Encore Business Solutions sell their Bank Rec solution that works directly with the General Ledger. If you are using GP this is a great and easy tool to use.

    ------------------------------
    Christine Boisvert
    Technical Sales / Report Trainer
    Vivid Reports
    Winnipeg MB
    ------------------------------

    Academy - Online Interactive Learning from Experts


  • 9.  RE: Moving Away from GP Bank Rec

    Posted 21 days ago
    Thanks Christine. We use Encore as our GP partner and I didn't know they had this solution.

    ------------------------------
    Alan Strutz
    Divisional Controller
    Sugar Mountain Food Brands
    Seattle WA
    ------------------------------

    Academy - Online Interactive Learning from Experts


  • 10.  RE: Moving Away from GP Bank Rec

    Posted 22 days ago
    Alan:

    We use the Electronic Reconcile routine (Microsoft Dynamics GP > Tools > Routines > Financial > Electronic Reconcile) to configure GP to match a file that we download from our bank.  This includes deposits, checks and charges.  When we run the process, it matches items in the file to GP and marks reconciled items.  It also gives a report of mismatched items that have to be reconciled by hand through the Reconcile Bank Statement process (Transactions > Financial > Reconcile Bank Statement).

    To make the matching more accurate, we implemented pre-numbered deposit tickets so that there is a direct match for deposits between the bank and GP.

    The process works fairly well and reduces the amount of time that would otherwise be required to reconcile our bank statement.

    ------------------------------
    Mark Lemer
    West Fargo Public Schools
    West Fargo ND
    ------------------------------

    Academy - Online Interactive Learning from Experts


  • 11.  RE: Moving Away from GP Bank Rec

    Posted 21 days ago
    Mark, that makes sense. I had always wondered what that option was in GP. We are basically doing the same thing only use Blackline's Matching engine instead of GP. Thanks for clarifying that for me.

    ------------------------------
    Alan Strutz
    Divisional Controller
    Sugar Mountain Food Brands
    Seattle WA
    ------------------------------

    Academy - Online Interactive Learning from Experts


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