Bank Reconciliation Statement cutting your business costs
If a discrepancy arises from only one source, then it would be easy deal with. But sometimes there are several discrepancies, from them some are on debit side and some are of on credit side of the account which creates confusions. To remove this confusion and analyze the discrepancies, a bank reconciliation statement becomes very useful.
What you need to prepare Bank Reconciliation Statement? • the cash book • the bank statement for the period (weekly, monthly, quarterly)
There are some methods to reconcile the bank statement: 1) Reconcile cash book to bank statement- Starting with the closing cash book balance and check step by step the bank balance and solve the discrepancies. 2) The opposite process – Reconcile the bank statement to the cash book
To prepare a Bank Reconciliation Statement • Compare the transactions that appear on both cash book and bank statement • Update cashbook from details of transactions shows on bank statement • Balance the bank columns of the cash book to revise the balance
Complete the Bank Reconciliation Statement • Enter correct date of the statement • Enter the balance as per the cash book • Enter sub-totals on reconciliation statement • Calculate balance as per bank statement
Thus, bank reconciliation statement helps businesses to reduce the amount of unutilized cash in suspense accounts. A bank reconciliation done regularly can reduce the number of errors in an accounts system and make it easier to find missing purchases and sales invoices.
It is good business practice to prepare a bank reconciliation statement each time a bank statement is received. The reconciliation statement should be prepared as early as possible to solve the queries- either with the bank statement or in the firm’s cash book.
bookkeepingindia@gmail.cGenerally bank reconciliation between the cash book and the bank statement final balance simply means an explanation of the differences. For more details to make the bank reconciliation, please visit us at www.bookkeepingservicesindia.com.
