Bank reconciliation is the process of comparing a company’s financial records with bank statements to ensure that both records match. It involves identifying and correcting any discrepancies between the two records. The goal of bank reconciliation is to ensure that the company’s financial records accurately reflect its cash position and that all transactions have been properly recorded. Bank reconciliation is typically performed on a monthly basis or whenever discrepancies are identified.
It involves reviewing bank statements, checking for any unauthorized transactions, reconciling deposits and withdrawals, and investigating any outstanding checks or deposits. By regularly performing bank reconciliation, businesses can identify and correct errors, prevent fraud, and maintain accurate financial records.
