Banking-Edu

Account reconciliation or balancing bank accounts is representing vital financial management task. You improvise on the correctness of your bookkeeping assuring that bank haven't made any errors, and by regularly reconciling your records you reduce your chances of being a victim of fraudulent transactions.

Bank Account Reconciliation Problem

At times reconciling a personal or corporation bank account with Microsoft Money can be frightening. If a comparative study between your records and the balance in your bank account and its records show inconsistency. Reconciling a bank account would just explain you the difference between your records and the bank's.

Missing Transactions

Usually two factors explaining the discrepancy between two sets of records are: your unrecorded transactions in your account that has been recorded by the bank could be for reasons like either the transactions that you have missed to record or bank fees transactions or interest that you did not realize to include until it appeared on the bank statement. There is also a possibility that the transactions are recorded in your records but haven't been recorded by, or cleared by the bank.

The bank account reconciliation process involves looking carefully at both factors. For example here first you need to look for and then record any transactions that you have missed or didn't realize prior receiving the bank statement such as: monthly service charges, interest amount, forgotten checks, and cash machine transactions.

Clarifying Difference between Your Records and that of Bank's

Next step is to identify the total number of transactions that you have recorded but that haven't yet been recorded by the bank records, like outstanding checks or check not encashed as well as deposits in transit. The sum total of these transactions needs to clarify the difference in your recorded balance and the bank's balance appearing on the bank statement.

Bank Account Reconciliation of Limited Liability Company and Corporation

While reconciling a bank account for a smaller business people other than owner and his family member, you should add an additional step to the basic account reconciliation software. Here you should be considering the possibility of forgery as well as embezzlement and finding evidences of crime as you reconcile.