To keep a record of your bank statement of your business up-to-date is very necessary for business. This process and track record enables business owner to produce their own financial reports as and when it is needed. It will also helpful in analyzing business position in market and also helps to make some necessary decisions for business.
Now, what is Bank
Reconciliation? Bank Reconciliation is comparison between the accounting figures that have been recorded and bank statement, reconciliation between the cash book and bank statement normally known as the difference. The difference can arise from two reasons:
- The time of the recording of the transactions in your book and bank account
- The error made by bank or business
General ledger of the company contains the transactions of checks written, cash receipts from customers etc. On the other side, the bank is also creates a record for these transactions. After a proper time, usually bank mails the bank statement to the company in one month period. This statement shows the transactions have been taken place during the particular month and also a bank balance.
When the company or business receives the bank statement, the company should verify that the amounts on the bank statement are similar with the amounts in the company’s cash account or in general ledger, this procedure known as reconcilement of accounts, bank statement reconciliation or bank reconciliation.
The company should do bank reconciliation every month to know the status of your different accounts and this will help you to make balance sheet at the end of the financial year and balance sheet will show the growth rate of your business.
It is important to do bank reconciliation and if you are not doing it then you might be taking major risks for your business because without bank reconciliation, you may not have a clear idea that how much cash is available in your account and it may be disturbing bank transactions.
SOURCE:
http://www.articlealley.com/article_981358_15.html
Now, what is Bank
Reconciliation? Bank Reconciliation is comparison between the accounting figures that have been recorded and bank statement, reconciliation between the cash book and bank statement normally known as the difference. The difference can arise from two reasons:
- The time of the recording of the transactions in your book and bank account
- The error made by bank or business
General ledger of the company contains the transactions of checks written, cash receipts from customers etc. On the other side, the bank is also creates a record for these transactions. After a proper time, usually bank mails the bank statement to the company in one month period. This statement shows the transactions have been taken place during the particular month and also a bank balance.
When the company or business receives the bank statement, the company should verify that the amounts on the bank statement are similar with the amounts in the company’s cash account or in general ledger, this procedure known as reconcilement of accounts, bank statement reconciliation or bank reconciliation.
The company should do bank reconciliation every month to know the status of your different accounts and this will help you to make balance sheet at the end of the financial year and balance sheet will show the growth rate of your business.
It is important to do bank reconciliation and if you are not doing it then you might be taking major risks for your business because without bank reconciliation, you may not have a clear idea that how much cash is available in your account and it may be disturbing bank transactions.
SOURCE:
http://www.articlealley.com/article_981358_15.html
No comments:
Post a Comment