Bank Reconciliation: How To Reconstruct A Bank Statement
Bank reconciliation can be the toughest part for bookkeeping. Some bookkeepers find bank reconciliation as a very interesting job., but there are those who find it very boring. Irrespective of the opinions, it is one of the most fundamental operations of accounting which should be done. As you can see, even the checks that has been processed late.
Knowing the concept of bank reconciliation
The bank reconciliation is the process of accounts and giving enough details to the discrepancies. You should keep in mind that the discrepancy in the balances may be due to the diverse timing of registering the information in the books and in your firm’s books. 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. The corporation do the bank reconciliation every end of the month.
Why bank reconciliation is a must
Every time you do monthly bank reconciliation, the records of the company will be clear and up to date. As a result, back log would be eliminated. Moreover, you will understand your accounting status all the time. It is incredibly important that you have solid and reliable communication and collaboration power with the financial system. 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. Outstanding or debit orders are additional to the payments.
Too many people in this world have hold a bank reconciliation at some point. However, since life is not perfect, there is a situation that bank reconciliation will not 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.
Depending on the extent and size of the entity concerned, every bank statement for a particular period could include of several pages. The transaction will not balance if there is one page missing. Transactions on the missing page impacts on the result of the bank reconciliation noticeably.
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.