across the world
What Kind of Errors to Avoid While Reconciling Bank Accounts?
Preparing bank reconciliation is an extremely crucial aspect of bookkeeping. Whether you are maintaining your own books and data records or perhaps you have taken advantage of the services of a bookkeeping outsourcing company, composing a monthly bank account reconciliation needs to be a ‘must do’ on your bookkeeping checklist.
Reconciliation bank accounts services fundamentally allow you to reconcile your cash book data (bills and payments) to the business banking account statements. It is essentially a check to sanction you have not skipped any kind of business financial transactions in your cashbook at any stage.
Stated below are some of the slip-ups, which many individuals tend to make while preparing bank account reconciliation:
1. Possible errors in manual cashbook
One typical error, if using a manual cashbook or spreadsheet, is that it may not sum up accurately. Unquestionably, it is quite possible to get it wrong whenever adding up a column of payments or invoices with a calculator.
In the same way, even though you make use of a spreadsheet, take care to verify the summation formulas, because in case one of them is incorrect, the entire column is going to be inaccurate at the same time.
2. Omission errors
Omissions of payments are another kind of error, which a lot of people tend to make while finishing the bank account reconciliation. For example, you may have written out a check, however, neglected to enter it in the cashbook. Not entering just about all the straight debits or standing orders in the cashbook is likewise an additional typical kind of omission error.
To stay away from these kinds of errors, it is recommended that you mark the bank statement entries to the cashbook transaction entries and also ensure at that time you have keyed in all the direct debits as well as standing orders.
3. Forgetting to add invoices in the cashbook
Linked to the above point, forgetting to key-in particular invoices in the cashbook is an additional typical error that can take place. Yet again, it is imperative you stick to a stern monthly regime wherein you mark up the bank statements to your cashbook invoices and make any necessary changes.
4. Outstanding checks error
Certain entries on a bank reconciliation consist of listing the number of any checks, that were written before the end of a particular month, however, do not show up in the bank statement until after the end of the month. These are generally referred to as outstanding checks. It is important to verify the outstanding checks on the bank reconciliation for the last month, all paid off.
Definitely, it is entirely probable that a check for the previous month, that you expected to clear, continues to be outstanding. In case, it is still outstanding, it has got to be carried forward and entered again on your existing reconciliation. Failing to carry forward these uncleared checks is a typical error that a number of people make any time carrying out the bank reconciliation.
5. Customer allocation errors
If your bank reconciliation seems to be accurate but customer accounts are not, there is a probability that you checked off the same number in a transaction but the customer attached is different. For example, you may have checked off a $400 payment in your bank reconciliation from Rose Jones when it was actually for Roger Jones.
This scenario becomes difficult to catch in the bank reconciliation process. To solve this problem, make sure that when applying for payments, you specifically check and note the names of your customers.
To know more info visit: Get your Accounting Business on Track with Bank Account Reconciliation Services
Reconciling Bank Accounts is a time-intensive task and needs to be handled by an expert. We at Cogneesol offer top-notch account reconciliation services to clients worldwide. Get in touch with us at +1 646 688 2821 to have an understanding of our 100% secure process.
How Insurance Backoffice Providers Help Insurers Bridge Talent GapRead More
Biggest Legal Profession Challenges in 2022Read More
10 Money-Wasting Business Accounting Mistakes You Must AvoidRead More
Real Estate Accounting – Common Mistakes to AvoidRead More
How Outsourcing Can Upgrade your Insurance Business Virtues?Read More
Insurance BPO: The New Imperative for Insurance CompaniesRead More