The process of confirming a transaction’s completeness by comparing a company’s balance sheet and bank statement is known as bank reconciliation. It may be known as “closing the books.” When companies claim to have “closed their books,” what they truly want to say is that “our bank’s record of those same transactions over that same period of time matches our record of incoming and outgoing payments over that same period of time.” When preparing a bank reconciliation statement, you have to follow certain rules that will be discussed in this blog.

Introduction to the Purpose of Bank Reconciliation Statement

Bank account reconciliation statement is a document that concludes the outcomes of the bank reconciliation process. This document shows the opening balance of the company’s bank account and the withdrawals and deposits that have been recorded by the bank and company. Small business bookkeepers can help you prepare bank account reconciliation statements.

The reconciling items appear on the record of a company, not on the bank statement. These may include bank fees, deposits in transit, outstanding checks, and interest paid or earned. By considering these reconciling items, the bookkeepers for small businesses can make adjustments to their records and make sure that their financial statements are correct.

Things Need to Consider When Preparing a Bank Reconciliation Statement

There are a few things you need to consider to avoid making any mistakes when preparing a bank account reconciliation statement. The rules will help you when you prepare the statement. Here are some rules you need to follow:

  • Any debit balance in the cashbook is considered the deposit of the business entity.

  • The debit in the cashbook must be equivalent to the credit in the passbook.

  • The credit balance in the cashbook indicates the fact that there is an unfavourable balance.

  • The debit balance in the cashbook points that there is a favourable balance.

  • Cheques are adjusted in the cashbook if they are issued but in any case not presented.

How Often Do You Need to Reconcile Your Bank Accounts?

In general, you should reconcile your bank accounts each time your bank sends you a statement, which usually happens once a month. You might also wish to do a weekly or daily bank account reconciliation, depending on how many transactions your company does. This guarantees that you remain ahead of any possible problems and can help lower the amount of transactions you have to go through each month.

Who Performs Bank Reconciliation?

Every business reconciles its bank accounts, but the method differs according to the size of the organisation, the number of accounts, and the intricacy of the bank statements. You can seek help from bookkeepers in Melbourne who are experts in handling everything related to bookkeeping and bank account reconciliation.

Five bank accounts, one for each category, such as revenue and operational expenses, might be kept by a large corporation. These accounts may handle transfers between other firm accounts or be located at five different banks. This additional intricacy can make the bank reconciliation procedure difficult to complete if done manually, taking weeks at a time.

Benefits of Bank Account Reconciliation

Your bookkeeping and accounting records are only useful if they are accurate. The following are some benefits of performing bank reconciliation:

  • You can keep your financial status up to date with bank account reconciliation so you always have enough funds. The process matches the records in your business books and what is in your bank accounts, credit card statements, cash accounts, etc., so you can have an accurate picture of your company’s cash flow.

  • By reconciling bank accounts, you can easily identify errors, mistakes and fraudulent activities that could be costly to your business.

  • When you or your bookkeeper reconciles your bank accounts, you can ensure that your balance sheet reflects your bank account balance and that there are no errors. Once you have accurate records, Melbourne accountants can easily help you prepare and lodge tax returns on your behalf.


When preparing a bank reconciliation statement, it is important to follow the rules to prevent errors or mistakes. A Reliable Bookkeeping Services provider can help you in preparing a bank account reconciliation statement.