Purpose of Bank Account Reconciliation

PURPOSE OF BANK ACCOUNT RECONCILIATION

A PRESENTA T I ON BY COGNEESO L

Bank account reconciliation is theprocess that is carried out to matchup transactions stated in your bankstatement to that of your company

financial records. It is a criticalaccounting task that you should

carry out each month.

WHAT IS BANK ACCOUNTRECONCILIATION?

Ensure BalanceAccuracy It match up the

transactions on boththe side and confirmsthe accuracy of thebalances shown in thecompany’s books withbank records.

#1

SpeedyRectification ofDiscrepanciesA bank reconciliation

discover problems that mayarise due to unusual

transactions or accountingerrors. It prevent more than

duplicate and erroneouspayment

#2

Detect MissingEntries Consider reconciling

accounts with heavyvolume monthly orweekly basis as it givesindication to updatethe entries if they arenot recorded in thebooks.

#3

Identify UncasheChecks

Reconciling bank accounthelps to check undue

delay in the collection andclearance of some

cheques.

#4

InternalAuditing

.

#5

When it comes forcompany annual audit,the auditors alwaysanalyse the company's bank reconciliationstatement as part of theirtesting procedures.

Evaluate BusinessPerformanceAccount bank

reconciliation is keycontrol in producingaccurate financialstatements and helpin reducing the risk ofany financial fraudthat take place.

#6

KEY POINTS TO CONSIDER

Bank account reconciliationsshould be complete - Make sure noaccount left behind.Account reconciliations should beaccurate.It should be reviewed in a timelymanner.Account reconciliation shouldfollow accounting principlesThe account reconciliation processshould be constantly reviewed andimproved as it reflects thecompany's position.

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