Bank Reconciliation

Bank Reconciliation


Bank reconciliation is a process where the bank balances of your accounting records are reconciled to the bank statements. This is an important process to spot errors, omissions and even fraud. The person performing the bank reconciliation should not be the person who handles the banking.

For example, in a retail business, cash sales are required to be deposited immediately on the following working day. In performing bank reconciliation, if you note that the cash sales of the last week of the month are listed as deposits-in-transit, you would need to initiate an investigation as there could be misappropriation of cash.

You can also detect unauthorised payments, for example, if a sum of money has been debited from the bank account but there were no record of this payment, you would need to promptly investigate the matter. 
 

Download a template to help you in the preparation of bank reconciliation.