The bookkeeping practice used by an accountant to discover errors in the balance recorded by a bank and that recorded in accounts of a company is usually called a bank reconciliation process. Whenever there is a difference among the balances in the books of the company and the statement; it has to be corrected. Bank reconciliation has to be used to discover where the error lies so that the same can be corrected.
If a check or even a series of checks are issued by the company and they are not presented at the depository services, then there is bound to be a difference in balances in the books of the company and the depository service. The trouble is that it is not always easy to reconcile the differences. Many a time, the transactions will have to be scrutinized one by one before the error is located. After identifying the error, it must then be rectified.
To fix the error, there is needed to make adjustments in the affected accounts. To make the process less tedious it is often a good idea to conduct the reconciliation process at frequent intervals. This process is best handled by special accounting software, which is designed to find and fix the errors. This software can go through the general ledger account to the company and find out which records do not have corresponding reverse entries.
When a transaction occurs between the depository service and a company, each must record the entry as either a debit or credit. At the end of the month, the depository service will issue a bank statement to the organization. In this statement, the depository service will list each activity between itself and the company.
An automated software program is secure and also easy to use. All that is required is to download the activity from the website of the depository service. In fact, two sets of data have to be imported and then an automated matching process begins.
After receiving this statement the company must verify that the entries shown are correct. They will need to check their records to find any mismatches. If a mismatch occurs, the company will have to start the process of bank reconciliation. There are many benefits to undertaking this exercise including finding out the amount of cash that the company has. The amount showed in the statement must match with the amount showed in the company accounts.
If a check or even a series of checks are issued by the company and they are not presented at the depository services, then there is bound to be a difference in balances in the books of the company and the depository service. The trouble is that it is not always easy to reconcile the differences. Many a time, the transactions will have to be scrutinized one by one before the error is located. After identifying the error, it must then be rectified.
To fix the error, there is needed to make adjustments in the affected accounts. To make the process less tedious it is often a good idea to conduct the reconciliation process at frequent intervals. This process is best handled by special accounting software, which is designed to find and fix the errors. This software can go through the general ledger account to the company and find out which records do not have corresponding reverse entries.
When a transaction occurs between the depository service and a company, each must record the entry as either a debit or credit. At the end of the month, the depository service will issue a bank statement to the organization. In this statement, the depository service will list each activity between itself and the company.
An automated software program is secure and also easy to use. All that is required is to download the activity from the website of the depository service. In fact, two sets of data have to be imported and then an automated matching process begins.
After receiving this statement the company must verify that the entries shown are correct. They will need to check their records to find any mismatches. If a mismatch occurs, the company will have to start the process of bank reconciliation. There are many benefits to undertaking this exercise including finding out the amount of cash that the company has. The amount showed in the statement must match with the amount showed in the company accounts.
About the Author:
Any person who has experience in the AR/AP department understands that balancing the books on a regular basis can be a very strenuous task. Avoid the stress of performing manual accounting procedures and invest in reconciliation software at www.AdraMatch.com! They offer packages that are simple and effective, and they will speed up the various accounting practices of your business.
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