You can set up a reconciliation as far back as the start of your last fiscal year. I would want to complete a manual reconciliation for 2018 and 2019 to be a little more certain of your starting point. I would also be cautious about 2020 if there are missing entries as you have probably all ready filed the tax returns. If you complete a manual reconciliation for 2020 as well then all entries that need to be made for  the three years can be made at the beginning of your 2021 fiscal year. All of the back reconciliations should be completed before starting to use Sage for the reconciliations as it will help to get a good starting point and then you can move forward.

Yes, you could skip the three years, not wise, and set up the reconciliation at the beginning of your fiscal year. You will need to know all outstanding deposits and withdrawals as at the start date of the bank statement. 

Thank you Alwyn.