Bank reconciliation is a term which you might frequently come across during the process of accounting. It can be defined as the process of matching the balances in an entity’s accounting records for a cash account to its bank statement. This process is implemented at regular intervals for all bank accounts, in order to ensure that a company’s cash records are correct. By proper bank reconciliation, we can determine the differences between the two in order to make changes to the accounting records, in turn resolving any discrepancies and identifying fraudulent transactions. Once you have received the bank statement at the end of each month, you have to compare the deposits, adjust the bank statements, adjust the cash account and then compare the balances. Bank reconciliation helps to detect errors such as double payments, missed payments, calculation errors etc. It also tracks bank fees and penalties and adds them in the books. It can spot fraudulent transactions and theft. To know more about it, please read further.

Pulkit Midha

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