BANK SWITCH – BEST PRACTICES
● To initiate a bank switch from AppFolio, navigate to Accounting. On the left side navigation menu, select Bank Accounts, and from the right side Tasks menu click on New Bank Account.
● If you are accepting online payments, the account must be enabled for online payments. You’ll want to have the following information available:
○ Bank account name;
○ New bank account routing number ;
○ New bank account number;
○ A voided check for the new account or a letter from the bank with the required information.
Keep in mind that this can take 3-5 business days to set up. Contact AppFolio as soon as you are ready to get an appointment scheduled.
● It is very important to reconcile the old bank account that you are transitioning to date. Once you set a date for the bank switch with AppFolio, be sure to keep the account(s) reconciled to date on a daily basis. If this crucial step is not accomplished, it will make it very difficult to reconcile the old and new bank accounts once the switch has been completed.
● Watch for any uncleared bank adjustments. Immediately following the bank switch is the time to identify any uncleared bank adjustments and to resolve them quickly.
● It is also IMPORTANT to understand that once the bank switch is made, you will not be able to tie new transactions to the old bank account. It is just as important to understand that you can not typically change or edit past transactions if it requires you to unreconcile a transaction. A General Ledger account coding can be edited when it does not require you to unreconcile a transaction. Post-bank switch items can be edited, but you will need to contact AppFolio for their assistance to do this.
● Do not void and recreate payments that were made out of the previous bank account (if you’re unsure – check the bank account listed at the top of the payable). If it is the previous bank that was associated with the property, to void the payable would cause an Adjusted Cash Balance issue in both the old and new bank reconciliations.
STOP! Don’t do this. Instead, submit a support request with AppFolio to help you with this task.
● Do not create and attempt to backdate transactions prior to bank switch date.
● Do not edit Journal Entries as there is a common AppFolio glitch where editing/saving old Journal Entries may reassociate them to the new bank account. You can review this by running a General Ledger with the bank account column added to see if Journal Entry bank accounts have been affected.
● Keep everything present date — attempting to change old transactions will almost always affect bank switches.
● If your Adjusted Cash Balance is off after a bank switch, and you can determine that the old bank account is off in the opposite direction by the same amount, it means you need to transfer money at the bank. Use bank adjustments in each account to show the transfer so you don’t need to work with AppFolio to complete the transfer. The bank adjustments represent each side of the transfer and should be dated within the date of the bank reconciliation where the Adjusted Cash Balance issue started.
● Do not reverse Journal Entries that were created with AppFolio to represent the transfer of funds, even if something looks incorrect. If you need to transfer because you feel it is causing an Adjusted Cash Balance issue, then reach out to AppFolio and re-do the switch.
This is an inclusive article on the subject of best practices for a bank switch but not exhaustive. The information explained above may be overwhelming, but there is no need for anxiety. APM Help & Bookkeeping is here for you with a free 30-minute consultation and on-going services that include but are not limited to:
● On-Demand Consulting;
● Cleaning up Your Books;
● Daily Bank Reconciliation;
● Audit Tools;
● Full-Service Bookkeeping
● Virtual Maintenance
Contact the Trust Accounting Specialists at APM today so that you can rid yourself of bookkeeping worries and get on with what you do best in Property Management.
Always happy to share with the Property Management Community,