Bank reconciliation report preparation

Posted by Imam Larh on Monday, 19 February 2018

> > Bank Reconciliation
Bank reconciliation is an activity that is done to match the right record company cash in the company with a note in the current account, in order to be known to those transactions that are already recorded by the company but not yet recorded by the bank or the instead so that it can be known causative difference cash balance. The bank reconciliation can be made in two ways, i.e. the final balance reconciliation and reconciliation starting balance.

1. final balance Reconciliation, among others:

  • Bank balance reconciliation Reports and cash balance to show the correct balance.

  • Reconciliation Reports bank balance on cash balances.
2. Reconciliation starting balance, revenues, expenditures, and the final balance.
  • Cash bank balance reconciliation Report (4 columns)
  • Reconciliation Reports and cash balances bank balances to the correct balance shows (8 columns)
> > Difference Causes the company's cash balance and cash balances bank
Some causes of the difference between the balance according to bookkeeping company with bank statements, as follows.

1. The Bank has not recorded certain transactions
  • The deposit is on the way. The company has recorded a cash deposit to the bank, but the bank has not been recorded.
  • Checks in travel (cheques still outstanding). cheques were drawn and have been published by the company, but the bank has not been recorded.
2. the company has not recorded a certain transactions
  1. Administrative expenses of the bank, banks usually charge a fee for handling the transactions carried out the holder of the current account. In General, the cost of administration of the new banknote in number by the company after the bank statement is received.
  2. Cash Receipt through the bank (incaso). Sometimes banks perform cash acceptance to being published into the current account of the company. By way of direct deposit to the bank, will be reduced the possibility of misuse of cash by employees of the company. This way it will also accelerate the acceptance of cash, compared with the receipt of carried out by the company. This kind of transaction is sometimes unknown company, so the company has not yet been recorded.
  3. Checks from consumers or debtors. The blank check is a check that not enough funds. If the company receives insufficient funds cheques (checks). Usually, it recently was known at the time the company received a report of the bank.
  4. Giro service or interest income. The Bank gives interest on balances were calculated on the basis of a certain percentage of the average current account balances per month. The interest rate or service current not that high when compared with deposits. The amount of interest that would be the income of the new Corporation is usually known after the company received reports of the bank.
  5. Cheque returned to the purveyor for other reasons (not a blank check). The Bank returns a check sometime to purveyor for reasons towing account has been closed, check the check expire (particular occasionally checks can only be used within the specified time period, when during that time period not redeemable, then the check is going to be no longer valid), the signature on the check was not valid, and there is an error in the writing of checks.
3. The Bank or the company has made the mistake of recording

For example, the bank might reduce the account balance of checking account holders for cheque drawn by the holder of the current account to another. Meanwhile, the holder of the current account records the nominal amount may be wrong check the retraction. 

If one of the parties or both of them made the mistake of recording, it can be ascertained that the balance according to the record company will not equal the balance stated in the report of the bank. If this is the case, then the cause of the fault must be found and corrected, and repair these errors are part of the reconciliation of the bank.

>>Bank reconciliation Procedures 
Bank reconciliation is performed by officers who were not involved in the management of cash. The procedure of its activity include the following:


1. The calculation of the difference between the cash balance
In a company that conducts accounting manually, according to the company's cash balance in the cash account book after done the posting of data receipt and journal accounts payable. Thus, the difference in the cash balance according to these with cash balance according to the current account at the end of a period known from the cash account balance is compared. 

Therefore, in the process of reconciling the bank required books and documents, among others, the cash receipt journal book, book journal accounts payable, bank account statements for the period in question, a list of proof of deposit to the bank for the period in question, and the receipt of cash and accounts payable supporting documents.

2. identification of the causes of the incidence difference cash balance
Bank reconciliation could be done by comparing the number of mutations newspaper account with debit data journal accounts payable and the amount of overdraft credit mutation with the data the number of cash receipts or proof of deposit.

>>Bank Reconciliation Report
1. final balance Reconciliation

  • Bank balance reconciliation Reports and cash balance to show the correct balance, basically this form reconciliation report preparation, i.e. doing addition or subtraction against cash balance according to the record company or the cash balance according to current account in accordance with the influence of the transactions that led to the difference in the cash balance, so in the end obtained the same balance. To create or compile bank reconciliation reports towards the right balance is to determine:

  1. Balance according to the bank or company should be modified from any causative difference cash balance.
  2. Changes to be made on the balance is concerned, whether to be plus or they must subtract.
The bank reconciliation report towards the right balance:

1. Start with the balance listed in bank statements or balances that are listed in the company's cash account.


  • Add or less right on balance bank. the things listed in the company's bookkeeping, not listed in the report of the bank:
  • a. Add the deposit on a trip on the balance per bank. Deposit in the deposit is listed as a deposit in the bank's report in the month concerned.
  • b. Less right from the check balance bank. Checks in travel is a check that has been issued of a company but does not appear in the report of the bank. This benchmarking is also the test that all checks that have been paid by the bank is a legitimate company check and have been recorded correctly, either by the bank or by the Corporation.
3.  Add or less right on balance book. the things listed in the bank statements but not recorded in the ledgers of the company.
  • Add a pad balance end book about cash receive directly from the bank and interest income over the balance of the current account in the bank.
  • Less kan perbuku balances with the bank's administrative expenses, the cost of printing checks, and reductions have been made by other banks.
4. Compute the balance of perbank which has sesuiakan and perbuku who have balances in the match. Both of these balances should be the same.

5. make a journal for everything there is on grain 3 above, i.e. things that are listed on the side of the book in bank reconciliation.

6. Fix all the errors contained in the company's bookkeeping and pass notifications to the bank if the bank has made a mistake.

b. the final balance reconciliation Reports according to bank toward the balance according to the record company.

This form of reconciliation is done by means of adjusting the entry has been made by the parties with reference to the note according to the company, so that if all the causes of the occurrence of the difference in the cash balance has been known, according to the bank's cash balance will be the same with cash balances, according to company records. Reconciliation form aims to find out the cause of the occurrence of the difference in the cash balance and test the accuracy of recording cash and not directed at the correct balance.

2. Reconciliation starting balance, receipts, expenses, and the balance of the end
Such reconciliation is normally performed by the accountant inspectors as tools of a thorough testing against the cash transactions. In doing this, the shape of the reconciliation necessary knowledge regarding the procedure of recording receipts and accounts payable and bank. 

This is because the procedure used to affect the amounts in the reconciliation.
The order of the columns from the report this form of reconciliation is beginning balances, revenues, expenditures, and the final balance. This is because that in the reconciliation column Favorites in form right this is the end of a balance period becomes the starting balance of the next period.

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