Reconciling a bank statement involves comparing the transactions listed in your bank statement with your own records, usually from your accounting software or check register. The goal is to identify any discrepancies or errors between the two sets of records. To do this, follow these steps:
- Collect documents: Gather your bank statement and your own records.
- Compare transactions: Match each transaction on your records with those on the bank statement.
- Mark discrepancies: Note any differences, such as missing or incorrect entries.
- Investigate: Verify the discrepancies by checking receipts, invoices, and other supporting documents.
- Adjust records: Make necessary corrections to your own records.
- Update bank statement: If the bank statement was incorrect, notify the bank to rectify it.
- Reconcile balance: Once the transactions match, calculate the adjusted balance to ensure it aligns with your records.
Effective reconciliation helps catch errors, prevents fraud, and ensures accurate financial records.