Not reconciling bank is one of the bad habits small business owners must ditch to ensure business success. Regularly bank reconciliation is critical for your small business to detect errors, prevent fraud and verify cash flow. If you are new to bank reconciliation or unable to do it properly, spancom can assist you with this key task.
Entrepreneurs may think of preparing bank reconciliation statements as a mundane task or a time-consuming process. However, performing a bank reconciliation is much more than that. In this blog, we will discuss what is bank reconciliation, how to prepare a bank reconciliation statement and how often you must do a bank reconciliation for your company.
What Do You Mean by Bank Reconciliation?
If you haven’t done bank reconciliation for your company yet. Let us explain it to you. Bank reconciliation is a critical accounting process where the companies match their bank statements with the transactions recorded in the financial records. By reconciling bank statements with financial statements, an organisation can confirm that payments have been processed and cash collections have been deposited into a bank account.
A bank reconciliation statement outlines the deposits, withdrawals etc. that affect a bank account for a specific period. Bank reconciliation statements are useful to businesses as it helps them to eliminate possible errors in transactions or bookkeeping. Businesses use it as a powerful tool to thwart fraud.
