Want to take your business to the next level? #Outsourcing #BankReconciliation might be the answer! With reduced costs, improved accuracy, and more time on your hands, outsourcing reconciliation allows you to focus on achieving your business goals. A bank account reconciliation statement makes a comparison between your company’s balance sheet and bank account. Generally, the cash balance mentioned on your balance sheet must be matched with the bank statement. If there are any differences, the bank account reconciliation process will make your cash records error-free. Now, the question arises, why there might be differences between bank statements and accounting records? Well, there can be various reasons why this happens, including: • Your company has recorded cash and cheques but they are still in transit. • Cheques have been deposited but they have not been processed yet. • Interest has been paid by the bank into the bank account. • Fraud or banking errors have been encountered. • A client doesn’t have enough funds for their cheques to clear. Specialized accounting software can be used to reduce the chances of facing these types of issues, but it is also a good idea to reconcile your bank accounts every now and then to maintain your business books.

1. To makes a contrast between company's balance sheet and bank accounts
Bank Reconciliation

2. Bank Reconciliation
• A lender account peace statement makes a contrast between your company's balance sheet and bank accounts. Usually,
the cash balance mentioned on your balance sheet may be matched with the lender assertion. The bank account peace
method will make your money records error-free if there are any differences. Now, the question arises, why there might be
distinctions between bank statements and finance information? Well, there can be various causes why this happens,
including
 Your organization has recorded cash and cheques but they are still in transport.
 Although checks have been deposited, they have not yet been processed.
 The bank has deposited attention into the bank account.
 Errors in finance or fraud have been reported.
 A consumer lacks the funds necessary for their checks to clear.
• Specific accounting software can be used to decrease the chances of facing these types of problems, but it is also a good
idea to balance your bank accounts every now and then to sustain your business books.

3. What is the Main Purpose of Bank reconciliation?
If your records and bank account don't match, you'll get the most accurate picture of your company’s
financial situation. You can ignore common errors, such as fraud or multiple payments.
How to do Bank Reconciliation?
Get bank records
the bank's transaction list is what you need. A state
ment, Internet banking, or having the bank send dat
a directly to your accounting program are all ways
to obtain this information. If you have a current and
credit card account, you will need both statements.

4. Gather business records
Retrieve your expenditure and income ledger, which can be in the form of a spreadsheet or maintained
through an accounting system. Some accounting software even allows for automated data extraction from
scanned bills and receipts

5. Identify the starting point Locate the most recent instance when your
financial records and business account balances matched. Use this as the
starting point for your reconciliation process.

6. Verify bank deposits: Review each deposit in your bank account to ensure it corresponds to your recorded
income. If any deposits are missing, determine the source, such as a sale, refund, interest, or other
transactions, and add them to your records.
Cross-check income in your business books: Compare each deposit listed on your bank statement with the
corresponding entry in your business records. Investigate any discrepancies and identify the reasons for
missing entries.
Review bank withdrawals: Record all bank withdrawals in your books, including any previously unrecorded
bank fees. Make sure that every withdrawal is accounted for and accurately reflected in your financial
records.
Match expenditures in your books: Ensure that each entry in your financial records aligns with the
withdrawals listed on your bank statement. Take into account factors such as uncleared payments,
alternative payment methods, or cash transactions that may result in temporary differences.
Confirm end balance: After reconciling all deposits and withdrawals, verify that your business bank balance
matches your financial records. The resulting end balance will serve as the starting point for your next bank
account reconciliation.

7. How often should Bank Reconciliation be done?
Bank reconciliation is an important task in accounting that should be performed regularly to ensure the
accuracy of your financial records. It is recommended to reconcile your bank accounts each time you receive a
bank statement, which typically occurs on a monthly basis. However, depending on the transaction volume of
your business, more frequent reconciliations, such as daily or weekly, may be necessary to stay on top of your
financial situation and reduce the workload.
Why Bank Reconciliation in Accounting is Important?
Bank reconciliation is crucial in accounting because it helps identify and resolve any discrepancies between your
business accounts and the bank statement. By comparing the two, you can identify missing transactions, errors,
or fraudulent activities. It ensures that all your accounts are in sync, providing you with an accurate financial
picture of your business.
What Accounts Need to be Reconciled Monthly?
Reconciling various accounts is important on a monthly basis. These accounts include accounts payable, credit
card transactions, payroll, accounts receivable, subscriptions, fixed assets, and others. By reconciling these
accounts against the balance sheet or general ledger, you can detect and rectify any inconsistencies, ensuring
that your business books are reliable and up to date.

8. Conclusion
In conclusion, bank reconciliation is a
critical process that helps maintain
the integrity of your financial
records. It is essential to perform
regular and accurate reconciliations
to identify discrepancies, reduce
errors, and have a clear
understanding of your business's
financial position. If needed, it is
advisable to seek assistance from a
trustworthy bookkeeper or
accountant to ensure the
reconciliation process is handled
efficiently.