Bank Reconciliation Template
Oak Business Consultant has prepared this Bank Reconciliation template as a guide for the small business owners to prepare Bank Reconciliation without spending money on Accounting services again and again.
What is Bank Reconciliation?
Bank reconciliation is a procedure that looks at the money balance of an organization’s balance sheet to the related sum on its bank statement. Reconciling the two records distinguishes whether bookkeeping Accountant and Bookkeeping changes are necessary. Bank Reconciliation is conducted at regular intervals to guarantee that the organization’s records are right and there is no difference. Thus they likewise help in the identification of mistakes and frauds.
Purpose of Reconciliation Statement
Generally, the adjustments according to the bank statement and the organization’s records are not equivalent because of deposits in transit, outstanding cheques, bank charges, the premium earned or paid, and so forth.
A Reconciliation Statement’s primary motivation is to recognize, resolve, and appropriately report the contrast between checking account and Bank Book. With the vast volume of bank exchanges, it gets vital to reconcile the bank with records. This statement will guarantee the proper recording of all bank exchanges. It is, therefore, an internal monetary report of business that clarifies and documents any contrasts between the bank book and the bookkeeping records.
How this Bank Reconciliation Excel Template can Help you?
This Bank Reconciliation template not only gives you an example of data that is required to complete this form but also enlists the adjusting entries that you would require as a result of bank reconciliation to make the Accounting Books match with the Bank statement.
Steps to Use this Reconciliation Template
- Distinguish uncleared cheques and deposits in transit.
- Add back any deposit on the transit.
- Deduct any outstanding cheques.
- Add notes, receivables, and interest acquired to the balance.
- Deduct Bank Charges and interest paid, service expenses, penalties, and so on.
- Match it with the organization’s balance. A few entries are missing to report either in the Bank book or not written in the bank statement if the distinction remains.
- It gives you an adjusted balance.
- The bank balance should match the changed balance of the Bank Book.
- Record every transaction that is different, in this Bank reconciliation excel template.
- Record the General Journal Entry in your accounting system.
- The Two balances must match now.
Contents of this Template
Here workbook has two files: the Accounting bank record and the reconciliation template. In book bank, you can record transactions done from the bank daily. Things like cheques issued and deposit, withdrawals of cash are recorded. As shown in the screenshot:
The above right corner shows the available bank balance according to the records. This offset never coordinates with the Bank statement because of few reasons. Whenever you have finished entering information into Bank Book comes the reconciliation part. For this reason, we set up the Bank reconciliation statement where your transactions should match with the bank transactions. It is quite a tiring task, but it won’t take 15-20 minutes if you maintain it daily.
Open the reconciliation template, and you need to follow these five steps:
You have to enter the date of the issue for the bank statement in the given cell. After it, you need to enter the closing bank balance as per the report and the Bank Book’s closing balance in the designated cells.
- Enter the outstanding cheques issued but not presented in the bank.
- Now enter any outstanding deposits in the designated area
- Enter any other outstanding adjustments here. These transactions have to be in a Book bank and not in a Bank statement.
- Now, balancing is the final step. Variance should be zero.
Benefits of Preparing Bank Reconciliation Statement
- It thus prevents theft from unauthorized transactions.
- Secondly, humans can make mistakes. A small error by a bank can cost much. Reconciliations help to eliminate them.
- It helps to company’s rectify an error made at its end.
- It helps to manage account receivables.
Reasons for Difference Between Bank Statement and Accounting Records
- Discrepancies can be due to the following reasons:
- Cheques were deposited but not credited by the banks.
- Cheques get issued but aren’t presented in the bank.
- Interest from a bank not recorded in the book bank.
- There may be other miscellaneous queries from the bank.
When can it be said that the Reconciliation is complete?
The Bank Reconciliation process completes after assurance that all the transactions are perfectly adjusted. Moreover, the balances of the Bank statements and the organizations’ cash account/Bank book are matching after passing the adjustment entries.
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All peach Areas are your INPUT CELLS. Please fill the PEACH AREA as per your business situation. All WHITE and GREY COLORED CELLS are CALCULATED and LINKED CELLS.
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