Bank Reconciliation
Understand how to prepare and manage your bank reconciliation to ensure your cash records match your bank’s statement accurately.
About Bank Reconciliation
Bank reconciliation is the process of comparing your company’s cash records with the bank’s statement to ensure they match. It is a crucial accounting task that highlights timing differences, missing entries, and errors that may impact cash flow accuracy.
Businesses often face discrepancies due to outstanding checks, deposits in transit, or bank charges that are not yet recorded in company books. By reconciling monthly, these mismatches are identified and corrected promptly.
Regular bank reconciliation provides businesses with a true picture of available funds, reduces the risk of overdrafts, and ensures that fraudulent or unauthorized transactions are quickly spotted.
Ultimately, bank reconciliation acts as a safeguard for financial accuracy and plays a major role in maintaining trust in financial reporting.
