No matter whether you have a small business or a large business, you need to have control over expenses, incomes, or the profit received. Do you understand what the bank reconciliation process entails? It is an accounting tool that can help you know whether your business transactions or books of account or any statements match with the bank statements or not. It enables you to find out financial mistakes at an early stage. So that you can take proper measures to rectify it.
your business will involve various transactions through the bank each month, the bank statement must match with the bank account in your accounting record. Do you have any variation while doing the comparison? At Escrow Consulting Group, we have leading accountants that perform bank reconciliation statements for you. It will reflect the reason for which the variation happens. We are the leading accounting and bookkeeping services in Dubai & we can help you track how money is flowing from in and out of the company.
What is Bank Reconciliation and How Does It Work?
Reconciling bank statements means comparing bank statements against your company’s internal accounting reports. It is prepared to find out if there are any discrepancies. The book balance in your accounting records is known as the book balance, whereas the bank balance is known as the bank balance. There could be discrepancies between your bank and book balances. You need to identify the difference and find out the reasons behind those differences. Either the in-house accountants or outsourced small business accountants can reconcile bank accounts on your behalf. You may have a different amount in your business books as compared to the amount in your bank account. In worst cases, it can lead to overdraft expenses, bounced cheques, cheques deposited but not cleared, and an overdrawn account.
When should you prepare the bank reconciliation statement?
A bank reconciliation statement can be run at any time during the year. A bank reconciliation statement can be performed at any periodic intervals. Bank reconciliation is the most common task managed every month. It is nothing but a cross-check of internal banking records against the bank statements. It ensures the Internal & external books of accounts match accurately. If there are any discrepancies, then our accounting and bookkeeping services can explain why it happens. It should be resolved at an early stage before it harms your business finance.
Why is a bank reconciliation statement Important in your accounting and bookkeeping?
As discussed before, it is important to reconcile your bank account frequently. Are you managing your business books on your own or outsourcing them? You have to reconcile your bank accounts in both cases. However, if you have an in-house accountant, then he or she is responsible for preparing the Bank reconciliation statement. We have the experience and skill to trace the fault sooner than your accountants. It will help you resolve the errors and prevent your business from a big loss. Reconciling is a part of bookkeeping for small businesses. The following are some reasons to reconcile bank accounts for your business:
- Bank reconciliation helps in tracking the transaction status
- Bank reconciliation can assist in the detection of fraud.
- Bank reconciliation done regularly keeps track of any differences between bank accounts and internal accounting records.
- Preparing the bank reconciliation regularly can save you money in the long term.
- Tracking the bank’s mistakes & confirming that your financial statements are equivalent to your bank statements.
- It reduces the risk of financial damage to the company.
- Tracks the discrepancies between bank accounts and internal accounting records.
If you have found any discrepancies between the amounts and the accounts, then these differences need to be explained. We generate bank reconciliation statements based on your accounting records or the bank’s records. It will enable you to identify issues before they get out of control. It is always wise to reconcile your bank statements whenever you receive a bank statement. We often do it at the end of the day, month, or week. It is ideal for businesses that contain several transactions. We are experts in reconciling bank statements and performing other bookkeeping tasks. You can use our accounting and bookkeeping services in Dubai to get the best things that your business deserves.