Bank Reconciliation Accounting

Bank Reconciliation – Keeping your Records in Sync and Up To Date

Bank reconciliation is a crucial part of accounting to maintain a correct, transparent, and up-to-date record. Sometimes, bank reconciliation accounting becomes challenging for different companies. If a company is working on the basis of a cash system, keeping in sync the cash transaction in the ledger entries with the bank records becomes a tedious task.

Although there are many challenges surrounding the bank reconciliation process, you can maintain a correct record if you follow some steps necessary for a healthy financial system. Mostly, people ignore these steps and procedures while managing and maintaining accurate financial records.

We will guide you on what bank reconciliation is and why it is important in a business entity. How can you maintain a meticulous transaction record without any calculation or missing data? Moreover, we will provide you with some crucial steps for making the bank reconciliation process smooth, accurate, and correct. So, let’s dive into the bank reconciliation discussion!


What Is Bank Reconciliation And Why Is It Important?

Bank reconciliation accounting is a process of matching the transactions entered in the bookkeeping of a business entity with the bank statement during a particular period. Any missing or incorrect data can make your finances troublesome and taxing for you.

Bank reconciliation helps businesses maintain a proper and up-to-date record of their finances and transactions. Moreover, this process of bank reconciliation helps identify any fraudulent activities that are tampering with your finances.


Need best bookkeeping and bank reconciliation services? Hire a team of expert accountants and financial advisors at Accotax. Contact our team now!


Maintaining a financial record and keeping it synced helps you avoid any financial problems later. Generally, the bookkeeping and bank records are matched when a bank sends a bank statement to the company. So, every company prefers bank reconciliation every month. However, you can manage records daily, weekly, quarterly, or for six months.

Here are some benefits of bank reconciliation:

  1. Financial Control
  2. Healthy Financial System
  3. Avoid Fraudulent Activities
  4. Identify Errors
  5. Identify discrepancies in the bank records and bookkeeping records.


Challenges In Bank Reconciliation

The process of creating a bank reconciliation statement is tedious at times and demands time and effort. Maintaining records has always created different challenges for different businesses. Different problems arise while reconciling the bank statements, depending on the size of an organisation.

One of the key challenges is to keep a balance accurate using the large data available in cash payments, checks, and credit card payments. It is highly likely that you have made a payment and it is reverted and cancelled.

The second challenge is the variation in time in which calculations are recorded and maintained. For example, if you made a payment via a credit card, enter this transaction in your ledger immediately. However, it is possible that the bank has not received the payment due to the delays in credit card payments. So, it will be very tiresome and difficult when you delay a payment over time.

The third challenge is in the auditing of the reconciled records and transactions. So, you can maintain a record on your spreadsheet or hire the services of an audit company.


How To Do Bank Reconciliation

Now, we are going to share the crucial steps of reconciling the financial records on your company ledger and bank statement. Any discrepancies in the entries may be identified, corrected, aligned, and settled on time on both statements. For this, you need to line up your end balances while reconciling bank records.

  1. Get access to the bank statement and the bookkeeping record
  2. Begin the reconciling process from the same date and time to avoid any missing records.
  3. Enter all bank deposits as income in your book records if the transaction was refund, interest, or sale. Sometimes, a date is missing on one of the statements. So, tally the transactions and deposits on both accounts and enter any missing data. Perhaps, you have some unpaid cheques. So, you will add this expense to your account. However, the bank account will not show this payment as it has been cancelled or reverted.
  4. Moreover, add all the bank fee and other service charges to your books also. Moreover, enter all the expenses and cash payments into your books as they will not appear on the bank records.
  5. Lastly, check the end balances on bank statements and company book records. Correct a variation If you find any in any of the record books.



In sum, bank reconciliation is a process to keep a record transparent and correct to manage the finances smartly and efficiently. This process saves a company from deceptive financial troubles following incorrect financial records.

The process of matching the bank records with the books transactions becomes tedious when using multiple payment methods, bounced checks, and credit card payments. However, a company can avoid these challenges if reconciling is performed regularly.

On the other hand, the advantages of matching records are countless as you achieve control over your finances, managing company expenses proficiently. Besides, it saves a company from any harmful financial frauds as it helps identify any errors and misleading information in finance instantly.

Moreover, bank reconciliation accounting helps correct any dissimilarities on time. It protects a company ultimately from any financial and monetary hurdles.


Accotax is a leading accounting & bookkeeping firm, dedicated to providing professional and 360 degrees for your financial needs. Get in touch with us now!


Request A Callback

Call Now