Bank Reconciliation Statement Cutting Your Business Costs
According to the bookkeepers, the bank reconciliation part is the toughest part among the entire process. Some bookkeepers find bank reconciliation as a very interesting job., but there are those who find it very boring. Irrespective of how the professionals see it, it has always been the most essential operations. Even the checks which are lately processed can be bounced.
Defining 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 normal or 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 firms generally do the bank reconciliation at the end of the month.
Reasons for maintaining bank reconciliation
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 very important that you have quick and solid communication system with the monetary system. The bank reconciliation is the basic process in checking the account on every bank statement. Charges at the bank are an additional to the deducted outstanding and amazing deposits. Debit or outstanding orders have always been an additional to the payments.
Too many people in this world have hold a bank reconciliation at some point. However, since life is not perfect, there is a situation that bank reconciliation will not be balanced. And this could be due to some missing information, than the skills and knowledge of the person carrying out reconciliation. In such circumstances, the bank statements should always be reconstructed.
There are several pages behind the size and extent of the corporation concerned. If in any case, one page is missing, the reconciliation will not balance. Transactions on the missing page influences on the result of the bank reconciliation apparently.
If you wish to get most of your firm, you need to take care of the financial transaction.
Bookkeeping is fundamental in operating your business in an informed way. It is incredibly important to have a transparent and honest transaction all the time. Without a doubt, one of the best ways to keep track your records is the bank reconciliation.