PURPOSE OF BANK ACCOUNT RECONCILIATION
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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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