We understand that your plate is already full. The tasks of managing bank reconciliations and maintaining your general ledger can be a time-consuming, administrative burden – your time is better spent managing and growing your business. And when you consider how costly bookkeeping errors can be, it becomes clear: Bookkeeping is best left to an experienced accounting professional who understands the complexities of record keeping.
Accurate books are the backbone of a successful business. Comprehensive bookkeeping services can help you improve your business’ overall financial health, spot opportunities for increased profitability, and better manage your cash flow. With bookkeeping services such as monthly operating statements, bank reconciliations, general ledger, balance sheets, financial graphs, and budgets, we can help you better manage your business’ financial records.
Bank Account Reconciliation
While a clean set of books is a key objective for every accountant, it’s also important to match the accounting records with the monthly bank statements. Our bank reconciliation services ensure that every deposit and withdrawal aligns with entries into your accounting records, and it gives you a clearer picture of your cash position for addressing planned outlays and investments.
A bank reconciliation is the process of matching the balances in a business’s accounting records for a cash account to the corresponding information on a bank statement. The goal of this process is to ascertain the differences between the two, and to book changes to the accounting records as appropriate. The information on the bank statement is the bank’s record of all transactions impacting the bank account during the past month.
A bank reconciliation should be completed at regular intervals for all bank accounts; otherwise, one may find that cash balances are much lower than expected, resulting in bounced checks or overdraft fees. A bank reconciliation can also detect some types of fraud after the fact; this information can be used to design better controls over the receipt and payment of cash.
If there is so little activity in a bank account that there really is no need for a periodic bank reconciliation, you should question why the account even exists. It may be better to terminate the account and roll any residual funds into a more active account. By doing so, it may be easier to invest the residual funds, as well as to monitor the status of the investment.
The essential process flow for a bank reconciliation is to start with the bank’s ending cash balance, add to it any deposits in transit from the company to the bank, subtract any checks that have not yet cleared the bank, and either add or deduct any other items. Then, go to the company’s ending cash balance and deduct from it any bank service fees, NSF checks and penalties, and add to it any interest earned. At the end of this process, the adjusted bank balance should equal the company’s ending adjusted cash balance.