Bank Reconciliation Statement Cutting Your Business Costs
Bank reconciliation can be the toughest part for bookkeeping. 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 bank reconciliation is the process of accounts and giving enough details to the discrepancies. 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. The firms generally do the bank reconciliation at the 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. 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. Charges at the bank are an additional to the deducted outstanding and amazing deposits. Outstanding or debit orders are additional to the payments.
A lot of people have a hold on bank reconciliation to some extent. There are instances that bank reconciliations cannot balance. 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. The transaction will not balance if there is one page missing. Transactions on the missing page influences on the result of the bank reconciliation apparently.
If you want to get the most of your firm, you need to take care of your financial transaction behind the principle of bank reconciliation.
Bookkeeping is 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. One of the ways to keep track of your books is the bank reconciliation.