Procedure to reconcile the bank statement
1. Balance the Cash Book
2. Compare the bank columns in the cash book with the bank statement. Tick the transactions that match.
3. Any outstanding items in the bank statement- enter into your Cash Book and rebalance your Cash Book.
4. Correct any other errors and rebalance the Cash Book
5. Prepare the Reconciliation Statement
Bank Reconciliation Statement Layout
Heading: Bank Reconciliation Statement for ____ as at ___[Date]
Balance as per Cash Book xxxx
Unpresented Cheques xxxx _________
Lodgements yet to be received xxxx
Balance as per the bank statement [Date] xxxx
Importance of Bank Reconciliation Statements
1. Enables errors in the Cash Book to be identified and corrected
2. Enables errors in the Bank Statement to be identified and investigated.
3. Enables missing items in the Cash Book to be identified and accounted for.
4. Acts as deterrent to fraud - Bank Statement is independant accounting record, prepared by bank, and providing means to verify entries in Cash Book
5. Enables out of date cheques (over 6 months) to be identified and cancelled in the Cash Book