N/A Changing Banking institutions and the Chart of Accounts

[618194]

how do companies manage from a COA perspective when they move from one bank institution to another? I have a client that has 1 G/L for every bank account.

As they move from one bank to another – they want to know what best practice is from a COA perspective – obviously trying not to have to create hundreds of new GLs for the new bank accounts.

 

[Kim Schmidt]

You probably will need to keep the old COA accounts in the G/L for historical reporting purposes, and to support bank reconciliation especially during a transition period. What my place does is use the subsidiary account as a way to separate the different banks' accounts within the same business unit/company. For a simplified example, you could have 1.11111.001 (MCU.OBJ.SUB) for Old Bank, and 1.11111.002 for New Bank. If you make these both Level 7 (for example) posting accounts, you can have 1.11111 as as level 6 non-posting account to roll up busuness unit 1's cash into a single account for reporting. And it's OK to have multiple G/L cash accounts point to the same bank account by having the same AID value.