Bank Reconciliation Statement Cutting Your Business Costs
According to the bookkeepers, the bank reconciliation part is the toughest part among the entire process. 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.
Knowing the concept of 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. 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. Every end of the month, all corporations do the bank reconciliation.
Why bank reconciliation is a must
When you do monthly bank reconciliation, it keeps your company’s financial records updated and apparent. You never build up an erroneous backlog. 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 fundamental process in checking the balance on every bank statement on a specified date with the balance in your 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.
Too many people in this world have hold a bank reconciliation at some point. There are instances that bank reconciliations cannot balance. And this could be due to missing information, than the skills and knowledge of the person carrying out reconciliation. In such instances, the bank statements should 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 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 much important that you have an organized, transparent and most up to date system in place.