Bank Reconciliation: How To Reconstruct A Bank Statement
Bank reconciliation has become the toughest part for the world of 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 bank reconciliation is the process of accounts and giving enough details to the discrepancies. You should consider that the discrepancy in the balance may be due to the timing brought differently in registering the information in the books and in your company’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.
Reasons for maintaining bank reconciliation
When you do monthly bank reconciliation, it keeps your company’s financial records updated and apparent. 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 important that you have a reliable and prompt communication system with the financial institution so that you keep your records apparent and precise. 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. Outstanding or debit orders are additional to the payments.
At some point in their lives, a lot of people hold a bank reconciliation. 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.
There are several pages behind the size and extent of the corporation concerned. One missing page 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 very important that you have a transparent, organized and updated bookkeeping system in place. The bank reconciliation is the greatest ways in tracking your records.