What is it? A bank reconcilation is a process in which a company checks that both its records and the bank’s records are correct. It’s a two step process by which they take any checks written during the month and compare it against all the checks that have cleared the bank. The second process is by looking at any money the bank charged or took in and make sure that they were recorded on the company books.
Why is it important? Discrepancies between bank records and company records concerning cash transactions are very common and can result from errors made by either the bank or the company. Bank reconcilation is critical to make sure these errors are caught. Doing a monthly bank reconcilation also helps you monitor cash flows and, importantly, gives you a way to uncover irregularities such as unauthorized bank withdrawals.
How often should it be done? Most companies do a bank reconciliation once per month.
At We Figure It Bookkeeping we take the monthly hassle of reconciling your bank statements and do it for you making sure that your company books are in order. Please contact us at wefigureitbookkeeping@gmail.com.
