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To reduce financial risk, both internal and external audits are important, so it is vital to ensure they are properly done. The bank reconciliation process can help you address any financial discrepancies or gaps and must be performed accurately daily, weekly, or monthly basis. Bank account reconciliation is not only responsible for maintaining accurate financial records, but it also offers numerous benefits like giving accurate financial information, enhancing cash flow management, and allowing fraud detection. In today’s blog, we’ll discuss how to fix differences in bank account reconciliation.

How to Fix Errors in Bank Reconciliation?

You should compare your bank transactions and bank statements to make sure your accounts are proper. After receiving a statement every time, you ought to reconcile your bank account. The discrepancy between the end balance of your statement and the reconciled balance decreases when you match your bank transactions with your statement. The difference should be zero once all of your transactions have matched. You must confirm a few things if the difference is not zero.

• Many times, people match the statement with the wrong bank account statement. Therefore, make sure your bank account is correct for the statement you are matching. Bookkeeper in Melbourne knows how to perform bank account reconciliation.

• You need to check the statement end balance date if it matches your bank statement. Some transactions may be lost if the statement end date is too soon. If it is too late, certain further transactions may be added.

• You have to match the transactions exactly as they appear on your bank statement when you reconcile them. Make sure you choose the right transaction if you have grouped certain transactions together (for instance, if you made multiple payments to the same vendor but entered them as one large payment when entering them).

• Make sure you have entered any bank charges or interest correctly.

• Don’t forget to check missing financial transactions that appear on your bank statement but not on your business books. You can also opt for Melbourne bookkeeping services if you don’t know how to reconcile your bank statements.

Impact of Poor Bank Account Reconciliation on Business’s Credit Control Processes

Bank account reconciliation is important for credit control processes. Bank account reconciliation can prevent your business from making losses when you are not able to track your expenses. The following are some impacts on a business’s credit control when reconciliation is not done properly:

• When reconciliation is not done properly, you could find yourself chasing invoices that already have been paid as it might confuse clients when you ask them for payments.

• In some cases, the wrong invoices appear in your accounts receivables. This is one of the most common issues with the bank account reconciliation processes, where double entries can lead to confusion.

• When you have to deal with several suppliers or customers, it can become difficult to follow the reconciliation guidelines and as a result, it can lead to intricate details of discounts, invoices, and even advance payments. This is where small business bookkeepers in Melbourne can help you.

Benefits of Proper Bank Account Reconciliation

When you reconcile your bank accounts properly, you can have the following benefits:
• Proper bank account reconciliation ensures that financial statements clearly show the company’s financial health. With stringent reconciliation, financial reports become reliable.

• The reconciliation process allows early detection of errors and potential frauds, allowing timely correction of the company’s assets.

• Proper reconciliation ensures compliance with legal requirements related to financial reporting. This is essential in terms of audits where the accuracy of financial records is crucial.

• Proper reconciliation leads to cash flow management, enhanced investment capacity and financial planning. With a clear cash flow, companies can make the right decisions on financing, investments, and payments to suppliers. Therefore, before making unnecessary blunders in bank account reconciliation, you can ask a professional bookkeeper to perform reconciliation on your behalf.

Conclusion

The blog shares the importance of reconciling bank accounts correctly. You can seek help from a Reliable Bookkeeping Services provider because, in bookkeeping solutions, bank account reconciliation is also included. Therefore, bookkeepers can reconcile your bank accounts on your behalf.

Also Read:-

Step By Step Guide for Bank Reconciliation Process

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