General Journal Entries should not be used for payments like
utilities or payroll or for purchases such as debit card or online
orders. Yes, it makes reconciling possible, but there are four reasons
why we don't do it.
- It is easy to leave the default "deposit" button clicked when the
entry is created, which results in the payments being posted as a
negative amount on the deposit report (and on the bank rec screen)
rather than on the check report, which, for the church board, affects
report clarity in a major way.
- There is no check number, which makes it difficult to search and
sort properly, or match documentation to an entry.
- It is easier to accidentally create duplicates. Because a payment is
not as easily identifiable and maybe because it was in the deposit
section, duplicate payments are often created. Sometimes they stay in
the outstanding check/deposit section for months, which then overstates
your expenses, affecting report accuracy.
- You can’t void a general journal entry like you can a check. So if
it needs to be reversed, it must be reversed manually, which is more
work.
Summary: General Journal Entries are useful during
reconciliation, for adjustments, interest, and non-donation deposits.
But they are not to be used during reconciliation for purchases,
payments or offering deposits.
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topics related to Bank Reconciliation
The original version of this page was provided to Jewel by the
Georgia-Cumberland Conference Audit Team. Created by Linda McCabe.