A bank reconciliation statement helps to reconcile the balance as per the company’s accounting records with the balance as per the bank’s statement as on a particular date. Differences may exist between these two balances because of many reasons. Bank reconciliation is performed by the accounts department of all companies. This article is a bank reconciliation template which can help.
Creating a bank reconciliation template
Balance as per bank statement as on (particular date): Add: Checks received but not deposited (referred to as outstanding lodgements) These are accounted for by the company in their books but have yet to be deposited in the bank account. So, naturally, the bank statement will not reflect these entries. Therefore, they have to be added to the balance as per bank statement. Add: Recurring payments debited by the bank These payments may not have been accounted by the company on a particular date, so they must be added back to the bank balance. These include bank charges and interest charged by the bank. Less: Checks issued but not presented (referred to as unrepresented checks) A company may issue checks to vendors or others. The company will account for these in their books. However, if these checks are not deposited by the parties, then naturally they will not be lodged in the bank for payment. Therefore, they will not reflect in the bank statement. These have to be deducted from the balance per bank statement. Less: Direct credits made in the bank account When direct payments are made to a company’s bank account (example: dividend, interest), the bank statement will show them as credits and add them to the balance. However, the company’s account departments may not have noted these. So, to reconcile the balances, these direct credits must be deducted from the balance as per bank statement. Or, if the balance as per the company’s book is taken as the starting point for reconciliation, then these entries must be added. = Balance as per company's accounts as on (particular date):
The bank reconciliation statement template must be created by someone who knows how to work with spreadsheet programs (like MS Excel). Additionally, advanced spreadsheet program users can even pull in data from accounting software. A frequent bank reconciliation process can help the organisation stay up-to-speed with its actual bank balance.