How To Make A Bank Reconciliation Statement
Every month, you need to prepare a bank reconciliation sheet.
You do this by comparing and correcting errors in your bank statement closing balance and Cash Book closing balance for the month or year end.
Having corrected any errors, both balances should be the same and you will get what in accounting terms we refer to as the bank reconciliation statement.
By this stage, we expect that you have written a cashbook that reflects all your receipts and payments through your business and bank account.
The objective is to reconcile with the bank. So what you are going to look out for at this stage are any transactions that you recorded in your cash book but do not yet appear in the bank statement and vise versa. In the event of no exceptions, you should have a bank reconciliation statement.
Regular Exceptions to note
If you by any chance amended a sales invoice :
If you received partial payment:
Please take note of these exceptions because the bank reconciliation deals with only cash movements. So any transactions on your side that do not pass through the bank will generate what we call reconciling adjustments.
If you issue a credit note, it reduces the amount you invoiced your customer:
The Reconciling Process
Match each entry in your Cash Book with the entry on the bank statement.
Payments made by direct debit or standing order will not yet be recorded in the Cash Book. Nor will bank charges and interest, hence subject to a bank reconciliation.
Make sure that every item appearing on the bank statement has been ticked off.
Some items will not yet appear on the bank statement.
Calculate the adjusted bank reconciliation balance.
Outline To Reconciling with the bank
When the figures agree, you would have successfully reconciled your bank account.If the figures do not agree, then there is an error. If the difference is $9.25, look for a sales invoice as above, other income, or payment entry for $9.25.
You may contact us, if stuck with your bank reconciliation, others wise it should not take you too long to find and correct any unreconciled errors.
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