Bank Reconciliation Statement Cutting Your Business Costs
According to the bookkeepers, the bank reconciliation part is the toughest part among the entire process. For some bookkeepers, bank reconciliation is fun, but for the others it is nothing but a boring job. Whatever way we look at it, it is one of the fundamental functions of accounting which must be done. As you can see, even the checks that has been processed late.
What is bank reconciliation?
The process of comparing and contrasting the account balance provided by your bank with that of the company’s book of accounts as well as giving details of any discrepancy is the bank reconciliation. You should keep in mind that the discrepancy in the balances may be due to the diverse timing of registering the information in the books and in your firm’s books. Such discrepancy is a typical situation and is rectified automatically within the small time. However, most frequently the discrepancy is due to an mistake, which has to be manually rectified and to catch this mistake, you need bank reconciliation. Every end of the month, all corporations do the bank reconciliation.
Why bank reconciliation is a need
Every time you do monthly bank reconciliation, the records of the company will be clear and up to date. As a result, back log would be eliminated. Moreover, you will understand your accounting status all the time. It is incredibly important that you have solid and reliable communication and collaboration power with the financial system. The bank reconciliation is the basic process in checking the account on every bank statement. Bank charges are an additional to the cashbook payments, deducted outstanding checks, and excellent deposits are added. Outstanding or debit orders are additional to the payments.
Too many people in this world have hold a bank reconciliation at some point. There is a certain situation that the bank reconciliation cannot be balanced. And this could be due to missing information, than the skills and knowledge of the person carrying out reconciliation. In such circumstances, the bank statements should always be reconstructed.
Depending on the extent and size of the entity concerned, every bank statement for a particular period could include of several pages. If in any case, one page is missing, the reconciliation will not balance. Transactions on the missing page impacts on the result of the bank reconciliation clearly.
If you want to get the most of your company, you need to take care of the money transaction behind the principle of bank reconciliation.
Bookkeeping is basic in working your business in an efficient manner. It is very much important that you have an organized, transparent and most up to date system in place. The bank reconciliation is the greatest ways in tracking your records.