Bank Accounts Not Reconciled for Years

Bank Accounts Reconciliation

Bank Accounts Reconciliation

Hi, I recently started a new position with a company. I have no accounting training other then I have worked in Accounts Payables before for 6 months. The main person in charge of all the accounting transactions and bank balancing and reconciliations has not been doing it for a long time.


There is a Bank A Operating Clients Trust Account which has not been reconciled since 2000. There is a Bank A Security Deposit Clients Trust Account which has not been reconciled since 2015. There is also a Bank B Security Deposit Clients Trust Account which has not been reconciled since 2015.

So my boss has asked me to get all the reconciliations current because he was unaware they were not being done, which he knows was his error for not making sure it was done. The person who was supposed to be doing it has been here since 2000.

So I have come across many discrepancies and there are red flags for fraudulent characteristics and activity which I have researched. I have told my boss and so he would like to at least just start in 2017 and then for all the pre 2017 stuff I believe he plans to hire out or deal with after he has time to process all of this.

I can't use our software to reconcile because it wont let you skip years of reconciliations. My questions is would it be best to start January 2017 and then just get one big figure for him to get account correct and then go back to research later. Or should I just start in 2015 and as discrepancies come up add adjustments? Thanks for any help or advice please.

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Dec 01, 2017
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When To Start Reconciliations
by: Stephanie

Hello,

Thank you for your inquiry regarding Bank Accounts that have not been reconciled for years.

It is typically best practice to do the reconciliations in chronological order. If tax returns have not been filed since 2015, I would recommend starting with January 2015.

If all tax returns are current I would recommend starting with January 2017 as your boss said he would like to start with 2017 and then go back later to figure out any prior discrepancies, .

You can do this by entering an Opening Balance Equity Adjusting Entry for the YTD discrepancy amount as of December 31 and then doing the reconciliations through current.

I hope this helps!

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