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How to set up and use bank accounts in Brightpearl

four white piggy banks in a row with documents and calculator

One of the things you need to do to run a business efficiently is keep track of where your money is.  Reconciling your bank accounts helps you ensure you have records of all your payments on the system so you know your aged debtors and aged creditors reports are reliable, accurate and up to date.

Reconciling your bank accounts also makes sure all those odd little payments without invoices are taken care of so your profit and loss report is accurate.

Although Brightpearl uses the terminology ‘bank account’, you really need to set up accounts to track any place where your money is held – even temporarily.  The obvious places are the real bank accounts e.g. your current account, savings account etc. but when you are in the retail business, money also has a tendency to be held in other places too!

Piggy banks

For example, if you sell through Amazon, they collect payments from customers immediately but only pass the money on to you once every fortnight.  So there is a pot of money held by Amazon on your behalf and this needs to be tracked by setting up a bank account within Brightpearl – even though it isn’t a bank account in the traditional sense.

Likewise, PayPal holds your money temporarily, and tracking your PayPal balance via a Brightpearl bank account is vital, especially if PayPal ever puts a hold on your funds, or you only draw down the balance occasionally.

Some other money-holding places that you need to consider are:

Merchant accounts – when you accept credit or debit  cards, all money collected is initially held in your merchant account and then transferred to your bank a few days later.  The merchant account is acting like a bank account and payments to and from it need to be tracked.  If you have more than one merchant account, then set up a separate Brightpearl bank account for each one.

Cash – if you take payments in cash, this needs to be recorded separately, with bank accounts set up for, for example, the petty cash tin in the office or the till in a retail shop.

Currency symbols

A word on foreign currency.

Generally, ‘normal’ bank accounts have separate accounts – one per currency.  These need to be set up in Brightpearl as separate accounts, e.g. ‘current account – sterling’, ‘current account – Euro’, ‘current account  – USD’.

What isn’t so apparent is how PayPal operates with multi-currency.  At first glance you appear to have just one PayPal account that has transactions in multiple currencies.  Behind the scenes though, you actually have several groups of money, each in a different currency.  So you have a pot of sterling, a pot of Euros and a pot of US dollars.  You can move money between the different currencies (and commit to an exchange rate at that point), withdraw money from any currency to your bank, and use the money to pay bills.  PayPal reporting can also be done on a per-currency basis.

The best way to set this up in Brightpearl is to have one bank account per currency e.g. ‘PayPal – sterling’, ‘PayPal – Euro’, ‘PayPal – USD’.  Each can then be reconciled individually.

Setting up the various bank accounts within Brightpearl may take some time, but once the system is set up you’ll be able to see exactly how much money you have at any time – and where it is.

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