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. As you can see, even the checks that has been processed late.
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. 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 normal or 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.
Reasons for maintaining bank reconciliation
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 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 account on every bank statement. 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.
A lot of people have a hold on bank reconciliation to some extent. 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.
There are several pages behind the size and extent of the corporation concerned. The transaction will not balance if there is one page missing. 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 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.