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A reconciliation reviews the income and expenses and compares what the bank has recorded compared with what you have recorded in your checkbook or accounting program
Bank statement should be reconciled with General Ledger to attain productive report. GL can be imported in excel format to find cheques that actually have been honored by bank. If you are daily maintaining your position, you are actually preparing bank reconciliation statement, this position will help you in every month end. All bank charges,FED,with holding taxes can be calculated on daily basis in separate excel sheet.
To reconcile bank statements with your accounting or book or cash ledger or journal records, ensure that both records are updated and with same period covered. Reconciling a monthly bank statement with a month-end accounting records is normally and preferably done to account for the correct cash balance on a timely basis. In comparing bank balance and book balance of cash, check for deposits in transit which is yet to be credited to the bank account yet already recorded as receipt in the books. You must add deposits in transit to the bank balance. Meanwhile, check if there are checks issued by the company that are already deducted in the book balance yet pending clearance with the bank. The amount of these outstanding checks should be deducted from the bank balance. On the other hand, review the deposits recorded in the bank statement to verify if there were deposits collected or received by the bank that were not yet recorded in the books. Some companies' clients pay through bank facilities, you can tag these as unidentified deposits and record such in the books (Adding it on the book balance). Also, there might be charges to your bank account that were not recorded in the books (service charge, taxes), and you should deduct these from your book balance. If the book and bank records of cash are still not reconciled, you need to review the amounts recorded for possible errors and correct such depending on where (either book or bank) the error occurred and reflect these as adjustments or correction of errors in your bank reconciliation.
Reconciling your bank statement should be done every month when you bank statement arrives in the mail. A reconciliation reviews the income and expenses and compares what the bank has recorded compared with what you have recorded in your checkbook or accounting program.
