(800) 931-6557
(800) 931-6557
ASP
  • Home
  • Services
  • Recruiting
    • Recruiting Team
    • Recruiting Process
    • Recruiting FAQ
    • Resume
  • Positions
    • Current Openings
    • Recent Openings
  • Oregon
  • Washington
  • Colorado
  • About
    • Clients
    • Testimonials
    • Diversity, Equity and Inclusion
    • FAQ
    • Resources
    • Submit Resume
  • Contact
  • Payments
  • Blog
  • Home
  • Services
  • Recruiting
    • Recruiting Team
    • Recruiting Process
    • Recruiting FAQ
    • Resume
  • Positions
    • Current Openings
    • Recent Openings
  • Oregon
  • Washington
  • Colorado
  • About
    • Clients
    • Testimonials
    • Diversity, Equity and Inclusion
    • FAQ
    • Resources
    • Submit Resume
  • Contact
  • Payments
  • Blog

​In Pursuit of Profit

Read our expert article below or sign up to get articles sent to your inbox.​

8/8/2018

Comments

What do you Need to Reconcile a Bank Statement?

 
Picture
At its most basic level, a bank reconciliation only requires two items – what is being reconciled and what it is being reconciled against.
​
Since bank reconciliations are account-specific, this requires obtaining current records of cash totals that should be present for a single account only. 
A sub-ledger and bank statement typically serve in this capacity, allowing businesses to reconcile actual account amounts against presumed cash totals. The sub-ledger is the most effective financial record to consult for a bank reconciliation because it is more specific than the general ledger, while the bank statement serves as a control total.

Whether these documents are physically obtained, or they are electronically imported and cross-referenced, they are the only mandatory requirements for a bank reconciliation.

Traditional Method

For as long as bank accounts have existed, bank reconciliations have been performed. Even balancing a checkbook is a form of personal bank reconciliation. However, bank reconciliations for businesses are a more complex version of the same concept.  

Traditionally, bank reconciliations require keeping a list of all transactions that resulted in cash moving out of the account as well as transactions that brought cash into the account, including checks and electronic payments. Those inflow and outflows of cash are checked against bank records manually to ensure proper recordkeeping.  

Then, bank fees, such as overdraft charges and NSF check fees, are accounted for to resolve discrepancies between the two balances. Any remaining differences are investigated to determine whether cash is in-transit, an error has occurred, or fraud is present. Exceptions are noted to aid in future reconciliations and forward-looking decisions are made regarding recurrent customer or supplier payment issues.

Using this traditional method of bank reconciliation can be time consuming, especially for high-volume accounts. The likelihood of encountering problems during the reconciliation process is high and uncovering the source of those issues to resolve them takes even more time.

To achieve greater efficiency, specialized software has been developed to remove the busy-work from the bank reconciliation process.

Modern Method

These days most accounting systems have at least some measure of electronic reconciliation capabilities. Wave, for instance, links to bank accounts to download transactions, consolidating financial information into one place to make reconciliations easier. Many software platforms have features that can categorize and match bank transactions automatically. QuickBooks can even reconcile accounts entirely for small business owners.

Automation allows less financially savvy employees to perform bank reconciliations in less time with fewer errors. For some small business this can help eliminate the need for a bookkeeper or accountant. In other cases, these automated reconciliation capabilities make it possible for small businesses to perform bank reconciliations more regularly.

These digital aids are the new norm for small businesses when trying to reconcile accounts. However, they do not come without their own concerns. Unlike reconciling by hand, where human error is the most common peril, modern reconciliation relies on far less tangible perfection, like uninterrupted digital account linking. Account synching issues and inter-platform reporting errors can result in data loss that will derail bank reconciliation attempts. Therefore, regular monitoring of data completeness is still needed to ensure accuracy.

With the knowledge of what a bank reconciliation is and how often one should be performed, the next steps are learning how to do one and understanding what kinds of problems can arise. Follow our ongoing blog series for comprehensive information of how the bank reconciliation process can benefit your business and how to conduct one like a financial expert. For more customized advice, hire an accounting partner to assist your business with bank reconciliations and other recurring financial needs.
​
Do you need help with your bank reconciliations?  Contact us today!
Comments

    SUBSCRIBE:

    DOWNLOAD:

    The Ultimate New Business Formation Checklist

    DOWNLOAD:

    Accountant Evaluation

    Categories:

    All
    Accountant
    Accounting
    Accounting Systems
    Audit
    Bank Reconciliation
    Benefits
    Bookkeeper
    Bookkeeping
    Brand
    Budgeting
    Business Analysis
    Business Trends
    Cash Flow
    Change Management
    Checklist
    Closing The Books
    Colorado
    Community
    Contracts
    Controller
    Depreciation
    Ecommerce
    Economy
    Finance
    Fraud
    Government
    Hack
    Hiring
    HR
    Infographic
    Internal Controls
    IRS
    Laws
    Leadership
    Legal
    Local Economics
    Manuals
    Market Trends
    News
    Nonprofit
    Online Bookkeeping
    Oregon
    Outsource
    Payroll
    Payroll Taxes
    Planning
    Procedures
    QuickBooks
    Record Keeping
    Recruiting
    Recruiting Market Reports
    Remote Workforce
    Reporting
    Restaurants
    Risk
    Sales Tax
    Scam
    Security
    Small Business
    Social Media
    Software
    Startup
    Statistics
    Strategy
    Taxes
    Technology
    Time Management
    Washington State

    Archives:

    February 2023
    January 2023
    December 2022
    November 2022
    October 2022
    September 2022
    August 2022
    July 2022
    June 2022
    May 2022
    April 2022
    March 2022
    February 2022
    January 2022
    December 2021
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    March 2021
    February 2021
    January 2021
    December 2020
    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    October 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017
    October 2017
    September 2017
    August 2017
    July 2017
    June 2017
    April 2017
    March 2017
    February 2017
    January 2017
    December 2016
    June 2015
    February 2013
    October 2012
    November 2011
    May 2011



    RSS Feed

Services

Accounting Services
Recruiting Services

​

Company

About
Oregon Team
​Washington Team
Colorado Team
Clients


Support

Contact
CC
FAQ
​Resources
​Blog
​

ASP

Your resource for accounting & recruiting services. Serving Seattle, Bellevue, Redmond, Kirkland, Portland, Beaverton, Hillsboro, Lake Oswego, Denver, Lakewood, Aurora and more.
Contact us today for a free,
no-obligation consultation:
Toll Free (800) 931-6557
WA (425) 492-1901
OR (503) 473-0122
​CO
(720) 572-8211
info@asp-nw.com
© COPYRIGHT ASP - ALL RIGHTS RESERVED 
 A CFO Selections Company
Privacy Policy