Simple steps for bank reconciliation

Despite the widespread use of accounting software by small business owners, organizations must nevertheless compare their bank statements to their personal records on a regular basis. This procedure, known as bank reconciliation, ensures that the company’s records are accurate and assists the company in identifying any anomalies, errors, or fraudulent charges. In this post, we’ll define bank reconciliation, go over how to do it, list some common concerns that arise during record reconciliation, and show an example of bank reconciliation.

What is bank reconciliation?

The practice of comparing a company’s records with its bank statements to ensure that all transactions are accounted for is known as bank reconciliation. The procedure is a useful tool for maintaining accurate records, avoiding fraudulent charges, and resolving any other disputes or concerns. Most businesses execute bank reconciliation, or bank rec, at the end of each month, but the frequency is mostly determined by the company’s size and quantity of transactions. Some larger organizations, for example, find it necessary to reconcile their data on a daily basis.

Bank reconciliation should be done on a regular basis, regardless of the frequency. Despite the fact that some businesses still keep their records by hand, accounting software is available to make the bank reconciliation process easier and more efficient. The majority of these tools combine the company’s bank accounts, allowing all data and records to be accessed in one location.

How to complete a bank reconciliation process

Here are the steps for completing bank reconciliation:

1. Get bank records
2. Gather your business records
3. Find a place to start
4. Go over your bank deposits and withdrawals
5. Check the income and expenses in your books
6. Adjust the bank statements
7. Adjust the cash balance
8. Compare the end balances

Share this ads