Online Banking: Tips and Precautions



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Doownloading bank transactions

I have one client that has 4 different bank accounts. About once every six months or so, the payroll account has problems with one or two checks that the bank "clears" for a different amount than the actual check amount (usually the checks are off by a couple pennies). The checks are entered into the payroll account (before transactions are downloaded from the bank). I also have payroll reports, which show the original amount of the checks (plus, I can print copies of the "cleared" checks from the bank website). In every case, the amount on the face of the check is correct, but the amount the bank "cleared" is wrong. So far, I have been unable to get the bank to correct the errors. The bank claims the checks were "cashed" by the employee for the wrong amount (at the employee's bank or check cashing place).

Does anyone know of a way to correct this kind of obvious error in QuickBooks so that it does not affect the payroll journal entries?

Kenneth Reid more than 2 years ago

I say 'change banks'

The bank upon which the checks were issues is ultimately responsible for disbursing funds in accordance with the written instructions of their account holders. A 'check' is a written authorization for the bank to disburse funds, if that bank decides they are going to pay something other than per your instructions then 'they are at fault' even if that is paid to another bank.

If this is a federally chartered bank you can file a complaint with the federal bank examiner, and if a state bank then the 'state's bank authority'...but I doubt that it will do any good in either case.

Therefore your best recourse, in my way of thinking is tell your bank....I'm taking ALL my business to a different bank and will be advising all of my clients to do the same if they use your bank.

If they are a 'big chain' (national bank) they really won't care, but if they are still a local bank, you bet they will but you got to 'get to the top', a cashier or even branch manager could care less.

Best of luck,

Murph more than 2 years ago

Don't use the human teller

When you deposit checks, use an ATM. The machine will verify each check's amount that you are depositing, unless the check is unreadable (a future issue for your policy manual on how to print numbers and sign in legible cursive). At the end of the deposit, ask for check images on the deposit slip. Save the deposit slip.

I too have had confrontations with the human bank managers after a deposit was recorded incorrectly. Again, the solution is to use the automated tellers who make far fewer mistakes, with these mistakes generally due to infantile handwriting.

dclaudew more than 2 years ago

Why not to Download Bank Data

I have had clients download bank data, then very carefully reconcile to that bank data. The Problem??? The bank information was wrong. For Example: $850 check deposited was posted as $85.00. It downloaded as 85.00, then the bank statement showed it as $85.00. The reconciliation will not show you that. So you end up reconciling the error to itself with no review.

I was called in to see why they were so "broke". Turns out that the scanners at one bank atm was dirty... and they had errors totaling over $9000 over a period of time for one client. This also can happen with payments made. I found errors with one client well over $20,000 over time, and we discovered embezzlement and check fraud in the process.

So, unless you have someone going back and matching receipts to the download I do NOT recommend using bank downloads.

Tina H Anderson more than 2 years ago

Bank Error in Your Favor? - Probably Not!

I recently deposited a $1600 check for payment received for my services. Alas, the bank only credited my account for $600. I'm not sure how this can happen with all the checks and balances that banks have in place, but yes, mistakes to happen. (it was corrected a week later when I called them up on it.)
As for Eileen's post about entering transactions to AP first, I agree-sort of. I am fully on board with accruing bills as they come in. But with today's prolific use of debit cards, I see accruing the expense as an unnecessary step. Timely bank rec's, and matching of receipts, are the answer.

Rondi Lindquist more than 2 years ago

Why not automate the verification process?

I can't believe how many accounting writers are terrified to go there. The simplest way to verify your downloads is to enter the Bills to AP and code payments against that Vendor to clear the account. It's called accrual. Not only does the date, payee and amount form part of the audit trail, to match the paper with its own information to the expense or capital cost, you've now provided a way to verify payment, which is also required to be proven. I like Wave's slogan - its an accrual world. Stop being such chickens, and get 'er done. There are so many reasons to use full accrual. You've mentioned a few, like fraud detection, but you haven't mentioned business growth. If you aren't recording costs as incurred, it's not so easy to check you haven't paid something already, and downright difficult to keep it all straight if sales take off for the sky. If you start out on the right foot, it's so much easier to run faster than if you have to change feet to speed up.

Eileen Reppenhagen more than 2 years ago

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