Bank reconciliations (bank recs) are critical for businesses to ensure that books are balanced, and any discrepancies are caught and addressed quickly. Yardi Voyager is a powerful tool, and with its Bank Reconciliation feature is invaluable. It is able to match up to most transactions, and flags any reconciliation issues for transactions it can’t match. Doing bank recs outside of Yardi does not catch internal control or theft issues, so using Yardi Voyager is essential. 

Although Voyager is a powerful tool, in order for it to be truly effective, you need to make sure your company is following bank reconciliation best practices, like the ones listed below. 

Complete your bank reconciliations monthly to catch fraud early and ensure cash flow is correct

If your accounting team is overwhelmed, getting around to bank recs on a monthly basis can be a challenge; however, falling behind can cost more time and money in the long run. Bank recs assist the organization to identify fraud, such as the same cheque being cashed more than once. Completing reconciliations monthly means you can detect fraud quicker and resolve the issue in a timely manner. Banks often have a time limit for refunding fraudulent transactions (often 3 months), so if that window is missed, it means having to take expensive legal action. 

Another benefit of monthly bank recs is that they allow you to accurately keep track of cash flow, to keep your business running smoothly.  Good cash flow management ensures that you have enough to pay your bills, make a profit, and invest in expanding your business. It helps catch issues such as overspending, and inaccurate reporting quickly, which can save your company significant amounts of time and money. 

Ensure Financial Covenants on Loans are met

Many companies that carry bank loans and third party debt require specific financial measurements to be met each reporting cycle, such as maintaining a certain debt-to-equity ratio or maintaining a certain level of cash flow.  Accurate cash numbers are critical for these calculations.  Incorrect data can lead to lenders calling debt amounts early, which can cause great hardships on smaller and medium sized businesses.  

Get your setup done sooner rather than later

In order to get the most out of Yardi Voyager, there are a few things you need to make sure are set up before you start running bank recs, including:

  • Bank accounts for new properties. If you don’t set up a new bank account immediately, it can result in expenses being paid through the wrong cash account. You need to add a bank account and attach a property and GL account before you make any deposits or withdrawal. This enables your Yardi software to include those transactions in the GL and in the bank rec. Getting the bank account set up ASAP ensures that all transactions are being paid from the right place, and that they show up in the GL and in the bank reconciliation screen. 
  • Electronic Fund Transfers. In order for EFTs to flow smoothly, you need the right documentation, and the right information. Making sure to get everything right from the start can save a lot of time and headaches, such as sending incorrect EFT amounts, or sending an EFT in error. It can take up to 10 business days to correct such errors. Even though such errors are usually fixable, they can cause issues that are more challenging to address. 
  • Closing the previous month. To set up a bank rec, you need to make sure the last month is closed, and that nobody posted a transaction after it was closed.

Of the above points, the most critical is setting up new bank accounts. Running a bank rec will not catch missing bank accounts. If you’re doing regular bank reconciliations, you’ll be able to catch most other issues. Unfortunately, fixing errors requires more time and resources than setting things up properly from the beginning. So make sure everything is set up correctly before you start your bank recs and avoid major issues.

Ask for help 

Although putting in place best practices is extremely beneficial in the long term, if your accounting team is overwhelmed, they may not have the time or resources to commit to implementing those best practices. Lynx’s staff of qualified experts can assist with this and many other Outsourced Accounting Services to help supplement your team. You can also combine these accounting services with any of Lynx’s other services, to create a support package unique to your company.