The bank reconciliation is sometimes a part of an accounting software package's ledger module and sometime shown as a separate module. Whichever, it is very much dependent on the entries that have been made in the Bank Account in the Balance Sheet section. It is used to 'tick off' the entries that are showing in the Balance Sheet Bank Account in the accounting software ledger against the statement that your bank has sent you. It is one of the important checks and balances that you should regularly carry out in your accounting software as you can pick up if any errors have been made when you have entered customer cheque details against their account or supplier cheques that you have issued. Before you can do the bank reconciliation properly you will need to make sure that you have entered all of the bank charges as well as any direct debits and, or, deposits. With bank charges you simply debit the Bank Charges account in the Profit and Loss section and credit the Bank Account in the Balance Sheet section. A Bank Reconciliation report in your accounting software could be presented in several different ways but essentially will tell you the following once you had ticked off all of the items on the bank's statement (using hypothetical figures) - Balance Sheet Bank Account Balance10,000.00 Plus un-shown deposits 5,000.00 Less unpresented cheques 6,000.00 Bank Statement Balance 9,000.00 This means that the last balance on the bank statement should be $9,000.00 |
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