Bank Reconciliation Statement Cutting Your Business Costs
Bank reconciliation can be the toughest part for bookkeeping. The opinion of every bookkeeper is very different because some find it interesting, while others is boring. Irrespective of how the professionals see it, it has always been the most essential operations. Checks which are processed very late can be bounced, if there is a sufficient stipulation for it has not been done in the business books.
What is bank reconciliation?
The procedure of comparing and contrasting the account balance provided by the bank with that of the firm’s book of accounts as well as explaining any discrepancy is the bank reconciliation. There may be differences, and this is due to the differences brought by the timing of registering in your book and the registering of information. 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. The corporation do the bank reconciliation every end of the month.
Why bank reconciliation is a must
First of all, maintaining a bank reconciliation every month will keep your company’s financial records updated and clear. Back log would be eliminated if you follow the rules of bank reconciliation. Furthermore, you can comprehend 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 balance on every bank statement on a given date with the account balance in your cash book. Bank charges are an additional to the cashbook payments, deducted outstanding checks, and excellent deposits are added. Debit or outstanding orders have always been an additional to the payments.
At some point in their lives, a lot of people hold a bank reconciliation. There is a certain situation that the bank reconciliation cannot be balanced. And this could be due to some missing information, than the skills and knowledge of the person carrying out reconciliation. In such instances, the bank statements should be reconstructed.
Depending on the size and extent of the entity concerned, a bank statement for a specific period could consist of several pages. One missing page will not balance. Transactions on the missing page impacts on the result of the bank reconciliation noticeably.
If you wish to get most of your firm, you need to take care of the financial transaction.
Bookkeeping is the basic in working your business in an efficient manner. It is very important that you have a transparent, organized and updated bookkeeping system in place. Without a doubt, one of the best ways to keep track your records is the bank reconciliation.