Bank reconciliation is the process of comparing and matching Financial Force transaction values against those shown on a bank statement in order to uncover any possible discrepancies. Any transactions found on the bank statement are said to be reconciled, while those not found are said to be outstanding. It checks if there are any two different sets of records for you and the bank in cash transactions. The ending balance of your version will be called the ‘book balance’. The bank’s version for the same is called ‘bank balance’. A bank reconciliation statement shows errors made in both the books by customers or banks and helps to rectify it. It helps in making future transactions secure with the bank if the customer is sure about the correctness of balance in the cash book. It helps in preparing the revised cash book as entries like bank charges, interest allowed or charged by the bank, etc. are recorded in the passbook and will be recorded in the cashbook in the future.

S Sai Hrishikesh

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