Bank Reconciliation Statement : Preparing Reconciliation Statement

Here are some notes on preparing a reconciliation statement in detail:

  • A bank reconciliation statement is a document that reconciles the balance of a bank account as shown on the bank statement with the balance of the same account as shown in the company’s records.
  • The statement typically includes:
    • The balance on the bank statement as of the statement date
    • The balance in the company’s records as of the statement date
    • A list of any items that have been added to the company’s records but not yet reflected on the bank statement
    • A list of any items that have been deducted from the company’s records but not yet reflected on the bank statement
    • The reconciled balance, which is the balance on the bank statement after all adjustments have been made
  • The steps involved in preparing a reconciliation statement:
    1. Gather the necessary information. This includes the bank statement, the company’s records, and any other relevant documentation.
    2. Match the transactions on the bank statement with the transactions in the company’s records. This can be done by comparing the dates, amounts, and descriptions of the transactions.
    3. Identify and explain any differences. If there are any differences between the two sets of records, the reasons for the differences must be identified and explained.
    4. Make any necessary adjustments to the company’s records. If there are any errors or discrepancies in the company’s records, they must be corrected.
    5. Prepare the reconciliation statement. The reconciliation statement should be prepared in a clear and concise manner, and it should be easy to understand.
  • The frequency of preparing a reconciliation statement depends on the size and complexity of the company’s operations. However, it is generally recommended that reconciliation be performed on a monthly basis.

Here are some tips for preparing a reconciliation statement:

  • Be organized. Keep all of your financial records in one place, and make sure that they are up-to-date.
  • Be thorough. Compare all of the transactions on the bank statement with the transactions in your records.
  • Be accurate. Make sure that all of your adjustments are correct.
  • Be clear. The reconciliation statement should be easy to understand.

By following these tips, you can ensure that your reconciliation statement is accurate and that your bank account records are up-to-date.