BankReconciliation FAQS

1.What is Bank Reconciliation Statement

A form that allows individuals to compare their personal bank account records to the bank's records of the individual's account balance in order to uncover any possible inconsistencies.Bank reconciliation is the procedure of checking your bank account statements against your accounting records to make sure that transactions have been recorded correctly. You need to do this to make sure that your accounting records are exact.

2.How do I get started?

You will need your check register, your most recent bank statement, a pencil and a calculator. Review your check register to make sure that each deposit was added to your balance and each check or withdrawal was subtracted from your balance.

3.Why is my statement balance different from my register balance?

Your statement balance covers only those transactions that were managed, or cleared, by your bank before the cut-off date printed on the statement. Your register balance must include all transactions, whether or not they have been managed by your bank. This is why the two documents need to be reconciled, or balanced.

4.Why is my statement balanced how can I be sure I recorded every transaction?

Look for transactions that appear in both your check register and your bank statement. Look at each transaction on your bank statement and find the conforming transaction in your check register. Place a check mark next to the transaction in your check register. If there are transactions on your bank statement that do not appear in your check register, you should add them to your register and update your balance consequently.

5.In what way do I reconcile my check register against my bank statement?

Make a list of entirely deposits recorded in your check register that do not appear on your bank statement, and add them together. These are your outstanding credits. Next, make a list of all checks and withdrawals recorded in your check register that do not appear on your bank statement and add them together. These are your outstanding debits. Next, add your outstanding credits to the balance shown on your bank statement and make a note of your total. Subtract your outstanding debits from the total you noted. This amount is your adjusted statement or reconciled balance and must equal the balance shown in your check register.

6.What does it mean when my adjustment statement balance does not match my check register balance?

When your reconciled balances don't match, you have amistake. If the inconsistency is a few cents you might choose to adjust your check register and call it a day. It it's larger, you need to find and correct the mistake. Most often the cause is a math mistake or a transaction that was recorded wrongly. Ask your bank for assistance if you are unable to reconcile the account.

7.What is bank reconciliation and why do I need to do it?

Bank reconciliation is the procedure of examination your bank account statements against your accounting records to confirm that transactions have been recorded appropriately. You need to do this to make sure that your accounting records are exact. If you are a Complete or Max customer, you need to complete bank reconciliation before our accountants can produce your Year End Accounts.

We recommend that you carry out bank reconciliation on a monthly basis when you receive your bank statement to minimize the chance of faults.

8.Why would I contact Bank Reconciliation?

Reasons for contacting Bank Reconciliation

• For help with a new change fund or to close an old change fund
• For help with a JES relating to cash transactions
• For support with items to be modified on the bank reconciliation
• For help to get a copy of a check if Accounts Payable, Accounts Receivable, or Payroll are unable to get the copy
• For support with missing/incorrect deposit/charge transactions (questions that cannot be answered by the Cashiering department)

9.When do I use a change fund?

A change fund is used to enable the collection of cash from customers. A change fund must always balance to its total and must be counted and associated with documentation at the close of every business day.

10.Can I borrow money from my change fund for personal use?

The change fund is to be used exclusively for business purposes. The Accounting Services office or Internal Audit may count the fund at any time. If any questionable inconsistencies are discovered they will be officially reported to the operating unit's supervisor and the appropriate vice president.

11.What must I do if my change fund is stolen?

If your fund is stolen contact the Public Safety office directly. The Accounting Services department will regulate whether your fund will be replenished. Situations sometimes permit your department or unit to cover any loses.

12.What must I do if my change fund is over or short?

Your own department's fund/department will be used to correct small errors. It is debited when there is a shortage and credited when there is an overage. If you are short or over use 4990 or 8990 to reconcile to the total. If the definite balance is ever different from the amount that must be in the fund the difference should be noted as ‘cash over’ or ‘cash short’.

13.What are the responsibilities/duties as custodian of a change fund?

As custodian of the fund your responsibilities and duties are to preserve the balance of your cash fund. Your unused cash plus the documentation must equal the balance of your fund. It is significant for you to reconcile the fund and be able to account for the cash balance.

14.Describe Bank Reconciliation Statement. Why is it prepared?

Bank Reconciliation Statement is a statement organized to reconcile the balances of cash book maintained by the concern and pass book maintained by the bank at periodical intervals. At the end of each month entries in the cash book are associated with the entries in the pass book. The causes of differences in balances of both the books are analyzed and then reconciliation statement is prepared. This statement is prepared for a special purpose and once in a month. It is prepared with an opinion to specify items which cause difference between the balances as per the bank columns of the cash book and the bank pass book at a specific date.

15.What are the causes which reason pass book of the bank and your bank book not tally?

• Cheques deposited into the bank but not yet collected
• Amount collected by bank on standing instructions of the concern.
• Interest debited by the bank
• Direct payment by customers into the bank account
• Cheques distributed but not yet presented for payment
• Bank charges
• Amount paid by the bank on standing instructions of the concern.
• Interest credited by the bank
• Dishonour of cheques
• Clerical errors

1.How does Bank Reconciliation Tips help?

Bank reconciliation tips help you to retain track of your financial transactions concerning your bank account. A bank reconciliation includes you reconciling your bank account statement with your own records. You can avoid overdraft charges, returned checks and penalizing bank charges through doing a proper bank reconciliation monthly. Bank reconciliations can be done by anyone with a bank account, using a computerized accounting software program or even a personal checkbook.

2.Why is bank reconciliation important?

Through comparing your bank statement to the cash book you will confirm that all your transactions have been posted to the cash book and also that all your bank transactions have remained completed.
There might also be items on your statement which will only be picked up by checking them; these contain bank charges, interest and payments which are made on direct debit or standing order.
Any mistakes which have been made in the statement period will also can be found and modified. These mistakesmight be writing amounts down incorrectly in the cash book. Reconciliation of the bank will also show up any fraud. It is much stress-free to sort the problem punctually

1. What are the tips to Reconcile Your Bank Account?

Use these tips to help make bank account reconciliation easier and less stressful.

• Record all transactions in your checking or savings account register. Save your receipts and ATM slips for all deposits (credits) and withdrawals (debits) so you can check them when you obtain your bank statement.
• Place a check mark next to all transactions that appear on your statement, such as deposits, interest, checks, electronic transfers, fees, and ATM withdrawals. These items have remained cleared at the bank.?
• Add up all deposits that you recorded in your register but that are not on your statement. These items have not cleared yet.
• Total up any withdrawals, as well as fees, that aren't on the statement but that are recorded in your register. These items also haven't cleared yet.
• To do a reconciliation, you'll need to write down the ending balance from your account statement, then add the amount of the deposits that have not cleared still.
• Subtract the amount of all withdrawals that were not on the statement. This reconciled balance must agree with the amount in your register.

1.What Is Added to the Book Balance on a Bank Reconciliation?

Individuals execute bank reconciliations to confirm that their checkbook balances match bank balances at the end of the month. It is an important part of keeping exact financial records. When performing a bank reconciliation, you begin with your book balance, which is the balance you recorded in your checkbook. To this balance, you should add or subtract transaction amounts until your checkbook balance matches, or "reconciles," with the bank balance

2.How to prepare bank account reconciliation?

Bank account reconciliations should be prepared monthly by the person responsible for reconciling the bank account and approved monthly by the suitable business officer. There are two types of reconciliations:

• Reconciliation of the Bank Statement’s ending balance to the ARC balance.
• Reconciliation of the Master Clearing Account (MCA) that is associated with the bank account to the record of expenses or revenues that have not yet been posted to ARC

1.What Happens When You Reconcile a Bank Account?

Bank account reconciliation confirms your accounting is exact and complete.

Reconciling your monthly bank statement to your business accounting records is an important part of the month-end close procedure. Reconciling accounting records at month's end assistancesconfirm that you have precisely reported income and expenses for the business during the month. Reconciling the bank account is the most important month-end reconciliation as all cash activity for the business flows through the business bank account.

1.In what way to Perform Bank Reconciliations

The basic difference between balancing a personal checkbook and a business account checking is the number of transactions and how they are relegated to numerous aspects of personal life or business accounts. Both types of accounts are reconciled in the same way. Reconciling personal checkbooks or business accounts is a foremost step in keeping tabs on financial standings. Reconciliation must be done monthly.

1. Why Bank Reconciliation process is important?

The only way to discover an exact bank account balance is through reconciling your record of bank transactions with records of the bank. Any mistakes, missing checks or bank charges are revealed in the reconciliation procedure.

2. What are the uses of Bank Reconciliation?

In order for checks to clear the banking system electronically, special encoding is required. This system leaves room for random mistakes. Comparing the amount you wrote on the check to the actual clearing amount on the bank's records uncovers these mistakes. If anyone is stealing from your bank account, you must discover the transactions and notify the bank rapidly.

3.Why must I bother with reconciliation?

You mustfrequently practice reconciliation to be talented to find your own mistakes in your books. Reconciliation might also show indiscretions such as fraud or theft at the bank, or even from someone in your home. The basic concept here is to discover whether the discrepancies lie with the bank or with your own mistakes. It might not be a bad idea to have someone do the reconciliation who has experience with reconciliation matters, particularly if you have never done it before.

4.When would I reconcile?

If you have simple books (such as for an individual or family), try to get to it every month or every second month. Even quarterly reconciliation might do well for individuals with simple finances. For larger businesses or any kind of "high activity" accounts, it must be done monthly without fail, or even more often.

1.Whatis the necessary of bank reconciliation?

Bank reconciliation is the technique of matching and comparing figures from accounting records against those existing on a bank statement and finding any inconsistency in bank statement or accounting books. The inconsistencymight occur in the balances due to the different timing of recording information in the bank account and company’s accounting books. Such inconsistency is normal and will be adjusted automatically within a short period. But sometimes the difference is due to amistake, and it should be modified manually and to catch the mistake you require bank reconciliation. Usually, companies perform bank reconciliation at the end of each month.

2.What are the Reasons for a Bank Reconciliation?

If you maintain a checking account at a bank, then you must reconcile your account to the checking statement that you receive every month in order to make adjustments to your records or to the bank's records. This can eradicate costly mistakes such as overdrawing your account. The procedure of bank reconciliation associates the transactions that you conducted to the transactions that the bank recorded. In the end, your checking balance should be equal to the bank's balance.

1.What is Bank reconciliation?

Bank reconciliation is a very multifaceted and very tedious procedure. Bank reconciliation is theprocess of comparing and matching figures from company’s books against those shown on a bankstatement. Reconciling your bank account statement is acomplete essential even if it is aexpensive and time consuming task. Bank reconciliation statement benefits businesses to decrease the amount of unutilized cash in accounts.

2.Do you provide Bank reconciliation services or any other services?

reconciliationaccounting is an Outsourcing company providing bank reconciliation services, accounting and bookkeeping services, data processing, data entry, data conversion, scanning and indexing, forms processing, web and internet research, and other back office administrative service offerings. Our project experience is comprehensive anddeep and we can address simple accounting, business accounting or bookkeeping requirements or complex projects with equal expertise and effective procedures and account management.

3.How can I be assured of high quality in my project?

We have a specifically designed workflow along with highly qualified QA professionals whose purpose is to deliver only premium quality services. You can test and confirm the quality of our work throughout the course of the project.

4.What is the Benefits of Outsourcing Bank Reconciliation Statement?

Benefits of Outsourcing Bank Reconciliation Statement

• Assistances in better and more effective maintenance of books of accounts
• Inconsistency between cash and bank pass book is detected easily.
• Personnel in accounts department can concentrate on more important issues.
• Corporates with high volume accounts are the biggest recipients.
• Less paper work reduces confusion

1.How can I remain sure I recorded every transaction?

Look for transactions that appear in both your check register and your bank statement. Look at all transaction on your bank statement and find the corresponding transaction in your check register. Place a check mark next to thetransaction in your check register. If there are transactions on your bank statement that do not appear in your check register, you must add them to your register and update your balance consequently.

2.How ensure I reconcile my check register against my bank statement?

Create a list of every deposits recorded in your check register that do not appear on your bank statement, and add them together. These are your outstanding credits. Next, create a list of all checks and withdrawals recorded in your checkregister that do not appear on your bank statement and add them together. These are your outstanding debits. Next, add your outstanding credits to the balance shown on your bank statement and make a note of your total. Subtract youroutstanding debits from the total you noted. This amount is your adjusted statement or reconciled balance and must equal the balance shown in your check register.

3. What does it mean when my adjustment statement balance do not match my check register balance?

When your reconciled balances don't match, you have amistake. If the discrepancy is a few cents you might choose toadjust your check register and call it a day. If it's larger, you require to find and correct the mistake. Most often thecause is a math mistake or a transaction that was recorded imperfectly. Ask your bank for assistance if you are unable to reconcile the account.

1. What is a Bank Reconciliation Statement?

A bank reconciliation statement is the technique used by individuals and entities to check the accurateness of their own transaction register against the records of their bank. The use of your transaction register, or checkbook register, is the primary source for recording the receipt and disbursement of cash through your bank account, while your monthly bank statement represents the corresponding books of the bank. Both sets of books should be reconciled and balanced with each other in order to detect outstanding items.

2. How to Read Bank Reconciliation Statements?

Sometimes bank reconciliation statements, which are provided by your bank to compare your personal bank account records with the banks, can be problematic to read at first. Still, to avoid bouncing checks and possibly causing an overdraft, you require to make sure there are no inconsistencies in your account. You can either use the reconciliation form provided each month with your bank statement or use your own paper or computerized format. Once you understand how to reconcile your personal bank account records with your bank statement, it will be stress-free for you to use bank reconciliation statements.

3.What is the process of Bank reconciliation Statement?

Bank reconciliation is the procedure of reconciling the bank statement balance, with the book bank account balance in the customer's (client's) books of accounts. The processmust result in the tallying of the two balances i.e. the adjusted bank balance calculated, must equal the adjusted book bank balance figure. The procedure of preparing areconciliation statement is a structured one, where bank reconciliation forms containing pre-printed items leave omission mistakes out. These forms are found on the back side of your monthly bank statement hard copies and make the procedure a whole lot stress-free.

4.What are the significant things to be remembered while preparing a bank reconciliation statement?

While preparing a bank reconciliation statement following significant points require to be remembered:

• Bank Reconciliation Statement is organized either by starting with the Bank pass book balance or Cash book balance.

If the balance of the Cash book is taken as a starting point then Cash book balance is to be adjusted in accordance with the entries passed in the Bank pass book and vice versa.

For instance: If the balance is taken as per the Cash book then the following items will be added:

• Cheques issued but not presented for payment;
• Amount credited in Passbook but not in Cash book;
• Deposits made in the bank directly;
• Wrong credits given by bank;
• Interest credited in the Passbook.

1.How to Prepare a Bank Reconciliation Statement?

Reconcile your monthly bank statement upon receipt to your check book register. This will defend you from over drawing your account with the bank or from missing mistakes that require to be corrected proximately. You need to list down on two separate columns all differences shown between the ending cash balance of your bank statement to the ending balance shown on your check book register. After all differences between the two sets of records are listed, the adjusted balances per each column must be equal to one another.

2. What Is the Definition of Bank Reconciliation Statement?

A bank reconciliation statement means that a person is prudently tracking the cash flows in and out of their business compared to what essentially happened. Review transactions electronically with assistance from a portfolio manager in the free video on money management and personal finances.

1.What are the Complications with the Bank Reconciliation Process?

Bank reconciliations are an important part of any accounting department. Accountants take the monthly bank statements for all company bank accounts and confirm the information against the company's general ledger. All differences and mistakes are noted and researched if required. Once the bank reconciliations are complete, they are typically reviewed by a supervisor and stored in a file for easy review through auditors. Because the bank reconciliations deal with a company's cash information, they are audited regularly by external auditors for accurateness and validity.

2.What are the Bank Errors?

The bank reconciliation procedure can be a long and difficult task, depending on the size of the company, the number of bank accounts it uses and the volume of transactions in the bank accounts. One complication found in the bank reconciliation procedure is bank mistakes from indecorously posted cash or wire transfer items. While bank mistakes are usually few and far between, they can occur and might cause some issues in getting them modified. Accountants mustmethodically review all information before contacting the bank to have the posting mistakesmodified.

3.What are the General Ledger Errors?,

Another common problem found in the bank reconciliation procedure is posting mistakes from the general accounting staff. Thesemistakes are quite common, particularly if the company is large and uses several types of bank accounts. Accountants mightimperfectly post general ledger (GL) items between company locations, post bank items backward or not post cash-related items into the company's GL bank account. Each kind of mistake adds time to the bank reconciliation procedure and mightnecessitateassistance from other accountants to find and appropriately correct the mistake. Another common mistake comes from the Accounts Payable (A/P) accounting department; these individuals are responsible for cutting checks and posting them in the GL. Several times, the check numbers are improper or checks are voided, creating more work for accountants completing the bank reconciliation. All A/P mistakesshould be documented and modified prior to completing the bank reconciliation.

1.DETERMINING ACCOUNT BALANCE?

Reconciling your bank account to your checks, withdrawals and deposit records assistances establish your true account balance. Your balance statement might not reflect payments that you have made but that have not been deducted from your posted balance. Knowing your true balance is important for avoiding overdrawing your account and confirming you have sufficient funds to cover required withdrawals for bill payments or spending money.

2.How can we Uncover Problems?

Repetitive review of your bank account statement lets you to uncover problems. Bank automation and human mistake can cause transposed numbers, improper deposit distributions and other mistakes that can affect your checking account total. Monthly bank reconciliation confirms that problems are discovered quickly, and routine reviews decline the time it takes to scrutinize your account. Monthly bank reconciliations can also keep you from missing any deadlines for reporting inconsistencies to your bank.

3.Identifying Uncashed Checks?

Uncashed checks can cause financial problems. Checks can go uncashed if they get lost in the mail, get separated from a bill payment stub or are forgotten. Identifying your outstanding checks can assistance you confirm that payments to your creditors are current. Uncashed checks can lead to an overdrawn account if you forget about the outstanding responsibility and rely exclusively on your checking account statement balance.

4.Internal Auditing is Possible?

Bank reconciliations are a monotonousprocedure in the finance and accounting departments of maximum businesses. Small businesses execute reconciliations to make sure the accuracy of their books. Large companies might be essential to perform monthly bank reconciliations as part of their internal audit procedures and to imitateto federal law regarding cash management.

5.What is Financial Review?

Monthly bank reconciliations can help as an unofficial financial review. Reconciling your spending and deposits lets you to see the flow of money and regulate whether you're spending more than you're depositing to the account. The evaluation offers an overview of where money is spent, which can head off long-term financial difficulties caused by overspending.