The bookkeeping practice used by an accountant to discover errors in the balance recorded by a bank and that recorded in accounts of a company is usually called a bank reconciliation process. Whenever there is a difference among the balances in the books of the company and the statement; it has to be corrected. Bank reconciliation has to be used to discover where the error lies so that the same can be corrected.
Whenever a check or even multiple numbers of checks are issued by an organization and the same are not presented to the depository service, a difference can appear in the depository service statement and company account. Fixing this problem is generally not a straightforward or simple task. This is because it takes a thorough search of every entry to find the one (or more) entries that are erroneous. The errors discovered will then have to be fixed.
To reconcile the error, it is often necessary to adjust the erroneous accounts. It is possible to do this with minimum fuss by regularly reconciling the accounts. Good accounting software should be used to find as well as remove the errors. The right software can check all the general ledger accounts and locate the records which do not have a matching reverse entry.
Every transaction entered by a depository service and a company have to be recorded as a debit and a corresponding credit in the books of the depository service and the company. At the end of every month, the depository service issues a statement showing just how much money is credited to the company's account. Each activity entered by the company will be shown in this statement.
An automated software program is secure and also easy to use. All that is required is to download the activity from the website of the depository service. In fact, two sets of data have to be imported and then an automated matching process begins.
The company, when it receives the depository service statement, will have to verify the entries listed in the depository service statement and check them against their own records. If there is a missing entry, the company needs to undertake the bank reconciliation process. This process is beneficial to the company as it is the best means of finding out the sum of money that the organization has. It also helps to find out whether this amount tallies with what the balance standing in the statement.
Whenever a check or even multiple numbers of checks are issued by an organization and the same are not presented to the depository service, a difference can appear in the depository service statement and company account. Fixing this problem is generally not a straightforward or simple task. This is because it takes a thorough search of every entry to find the one (or more) entries that are erroneous. The errors discovered will then have to be fixed.
To reconcile the error, it is often necessary to adjust the erroneous accounts. It is possible to do this with minimum fuss by regularly reconciling the accounts. Good accounting software should be used to find as well as remove the errors. The right software can check all the general ledger accounts and locate the records which do not have a matching reverse entry.
Every transaction entered by a depository service and a company have to be recorded as a debit and a corresponding credit in the books of the depository service and the company. At the end of every month, the depository service issues a statement showing just how much money is credited to the company's account. Each activity entered by the company will be shown in this statement.
An automated software program is secure and also easy to use. All that is required is to download the activity from the website of the depository service. In fact, two sets of data have to be imported and then an automated matching process begins.
The company, when it receives the depository service statement, will have to verify the entries listed in the depository service statement and check them against their own records. If there is a missing entry, the company needs to undertake the bank reconciliation process. This process is beneficial to the company as it is the best means of finding out the sum of money that the organization has. It also helps to find out whether this amount tallies with what the balance standing in the statement.
About the Author:
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