Bank Reconciliation

What is Bank Reconciliation?

Bank Reconciliation is a vital process in accounting where an organization compares its financial records with the bank's account statements. This process is done to ensure that the amounts recorded in the organization's books match the actual amounts reflected in the bank statement.

Short Description: A process of comparing and matching a company's financial records against its bank statement to ensure accuracy and identify discrepancies.

• Purpose: Ensures accuracy in financial records by detecting errors, omissions, and potential fraud.
• Process: Involves adjusting the balance shown in the records and the bank statement for outstanding checks, deposits in transit, and bank fees.
• Frequency: Typically performed monthly to ensure that the records are up-to-date and to maintain accurate financial reports.

Effective bank reconciliation is essential for maintaining financial integrity and ensures that decision-makers rely on accurate and verified financial information.