The Bank account reconciliation process is used to ensure that the cash balances the company shows on its book match the actual cash they have in its bank account. When you have to deal with several financial transactions, it is important to think of bank reconciliation.
Bank Reconciliation Explained
When reconciling their accounts, companies compare the information on their external bank statements to the recorded cash transactions in their general ledger, known as “cash books.” This process, called bank reconciliation, is used to identify discrepancies and bring the two balances into agreement by accounting for any unrecorded transactions, such as deposits that have not yet cleared or new bank fees. Bank reconciliations are a crucial aspect of managing cash flow and are typically managed by either the accounting department or the business owner.
Why is Bank Account Reconciliation Important?
After getting a bank statement, you can ask your bookkeepers in Melbourne to compare the statement to the actual transactions in your business records. If there is any discrepancy, then the bookkeeper will find out why. Generally, the difference might be due to a mistake made when entering a financial transaction or because your transaction is missing. If your bookkeeper finds such type of discrepancy, then they will be responsible for fixing it and marking the business records reconciled.
In large enterprises, where several people have access to the bank account of the company and the power to withdraw or deposit cash – it gets easy to commit fraud. Additionally, due to an organization’s enormous size, it is quite impossible to uncover little financial thefts if a thorough bank reconciliation statement isn’t made. By opting for bookkeeping services in Melbourne, your bookkeeper can discover several frauds with this one statement before it’s too late, including whether checks issued in the company’s name were altered, whether they were issued without proper verification, whether any money was taken out of the account without proper authorisation, whether the account had any missing deposit entries, etc.
Avoid Administrative Issues
Business organisations can find and fix administrative issues with their current record-keeping system with the use of bank account statements. This will help you decide how to manage your cash flow and accounts receivable, and it might even inspire you to improve your record-keeping procedure and accounting methods. Bookkeeping services for reconciling banks and credit cards – make sure that the administrative process is always in motion by keeping track of your bank account balance, preventing check bounces, avoiding bank fees for inadequate balance, spotting bank problems, monitoring the status of customer payments, and much more.
Track Received Payments
The bank reconciliation statement’s role in the accounting process includes checking to see if all payments have been received. When the accountant deposits many checks into the bank, occasionally one check may be forgotten to be deposited, or if the check is deposited on the final day of the month, the bank will enter it in the following month. Additionally, if one of your clients hasn’t yet cleared your payment, all of that can be quickly determined by carefully comparing two books. To keep your accounts in check, you can also seek help from an accountant near you by searching for the term ‘accountant near me’ to find one near your location.
Verify Cash Flow
Small business owners often have less capital available to them, so they must constantly monitor the precise state of their company’s cash flow. When their finance team does not give the monthly bank reconciliations top priority, this is impossible to accomplish. Bank reconciliation reports are also examined by lenders and investors to determine the financial soundness of a company, which is another reason why they should be current.
Get Bank Account Reconciliation Services
Now, you know the importance of bank account reconciliation for your business, thus, it is important to get these services to prevent fraud in your company. Therefore, make sure to get these services from a reliable company, like Reliable Bookkeeping Services provider.
If you have accurate business records and bank statements, you can better decide for your company. For better bank account reconciliation and bookkeeping solutions, you can contact Reliable Bookkeeping Services provider.