Bank Reconciliation

What Is a Bank Reconciliation?
To make sure that all transactions in your business have been correctly accounted for, you will need to reconcile the position as shown by your cash book records with that shown by your bank’s records.

This process is known as a “bank reconciliation”.

The purpose of the bank reconciliation is to reconcile the balance showing in your books with those shown in the bank’s books where it relates to all transactions that have gone through the bank accounts.


2 Main Reasons for Differences in the Reconciliation
Two main reasons for any difference in the positions are:

  1. Unpresented checks: These are checks which you had written out in your business and entered into your books as having been paid, but they were not yet showing in your bank's records via the bank statement. This would come about because it sometimes takes a few days for the checks to be presented by the p...

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