Bank Fees and Interest Belong in the Reconciliation Period They Occur
Bank fees and interest often exist only on the statement, which makes them easy to overlook until the reconciliation will not balance. In MIP®, the clean way to handle this activity is to record it with a journal voucher to the cash GL and the appropriate expense or revenue account, then mark the entry cleared in the same reconciliation period.
Doing this monthly keeps the reconciliation aligned with the bank’s activity instead of forcing explanations later. Fees are recognized when they actually occur. Interest income is not delayed. The cash balance ties to the statement without carrying unexplained differences forward.
When bank-side activity is booked consistently, reconciliations tend to close faster and require less documentation. The work stays mechanical instead of investigative because the system already reflects what the bank did.
This video is for accounting teams that want reconciliations to explain themselves without side schedules or follow-up entries. It is not intended for organizations that prefer to let bank fees and interest accumulate and deal with them only when something breaks.
McGovern Consulting Group provides MIP Accounting® Training and Implementation Services. We focus on routine disciplines like this because accurate books are built from repeated, ordinary decisions done correctly.
If you want your reconciliations to stay aligned with the bank each month, schedule time with us to review your process.
https://mcgoverncg.com/schedule/
If you want to strengthen your MIP fundamentals first, free MIP® fund accounting training is available here.
https://www.freemipfundaccountingtraining.com/
#MIPAccounting #BankReconciliation #CashManagement #NonprofitAccounting #FundAccounting #AccountingProcesses
