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. Whatever way we look at it, it is one of the fundamental functions of accounting which must be done. Even the checks which are lately processed can be bounced.
Knowing the concept of 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. 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 a single mistake, which has to be rectified on hand 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 need
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 be able to understand the status of your accounting from time to time. It is incredibly important that you have solid and reliable communication and collaboration power with the financial system. The bank reconciliation is the fundamental process in checking the balance on every bank statement on a specified date with the balance in your book. Charges at the bank are an additional to the deducted outstanding and amazing deposits. Debit or outstanding 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 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 extent and size of the entity concerned, every bank statement for a particular period could include of several pages. One missing page will not balance. 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 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.
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