Bank Fees and Interest Should Be Posted Before You Start Clearing
Interest income and routine bank fees originate at the bank, not in your accounting system. In MIP®, they need to be entered intentionally so the reconciliation reflects the full activity on the statement.
Posting these items monthly to dedicated general ledger accounts ensures they appear on the bank reconciliation grid. When they are entered and posted before any clearing begins, they can be marked cleared using the statement date, which keeps the reconciliation aligned with the bank’s timeline. If they are added after clearing starts, they often feel like discrepancies even though they are not.
This order matters because reconciliation is a matching exercise, not a discovery process. When bank-side activity is recorded first, clearing becomes mechanical and predictable instead of iterative and corrective.
This video is for accounting teams that want bank reconciliations to explain themselves without extra notes or backtracking. It is not intended for organizations that prefer to add bank fees and interest after the fact and then work around the difference.
McGovern Consulting Group provides MIP Accounting® Training and Implementation Services. We focus on sequencing and structure because most reconciliation issues are created by doing the right steps in the wrong order.
If you want your reconciliations to move cleanly from start to finish, 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/
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