Are you looking for professional help to reconcile your accounts? Kloudac provides professional bank reconciliation services in Dubai, for all the categories of organizations besides the size of their organization. Through our expert account reconciliation services, we make sure that the actual account balance matches the corresponding bank statement, preventing fraudulence and legal issues to help our clients focus fully on their business goals. Outsourcing bank reconciliation services to a financial expert like Kloudac not just ascertain the accuracy of your company’s financial statements but also ensures compliance with regulatory/ statutory requirements.
Companies that are having a huge number of transactions, either online or cash/cheque deposits and withdrawals, etc., will be time-consuming work for the accounts department within the companies. In such cases outsourcing the bank reconciliation process will be appropriate for them.
Bank Reconciliation Process
01. Equate the Deposits
Match the deposits in the business records with those in the bank statement. Compare the amount of each deposit recorded in the debit side of the bank column of the cashbook with the credit side of the bank statement and the credit side of the bank column with the debit side of the bank statement. Mark the items appearing in both the records.
02. Adjust the Bank Statements
Adjust the balance on the bank statements to the corrected balance. For doing this, you must add deposits in transit, deduct outstanding checks and add/deduct bank errors.
03. Adjust the Cash Account
Adjust the cash balances in the business account by adding interest or deducting monthly charges and overdraft fees. To do this, businesses need to take into account the bank charges, NSF(non-sufficient funds) checks and errors in accounting.
04. Equate the Balances
After adjusting the balances as per the bank and as per the books, the adjusted amounts should be the same. If they are still not equal, you will have to repeat the process of reconciliation again. Once the balances are equal, businesses need to prepare journal entries for the adjustments to the balance per books.
Once the balances are equal, our experts help companies to prepare journal entries for the adjustments to the balance per books. Timely reconciliation of bank accounts is very vital to ensure proper control and a sufficient balance of funds in the company.
Advantages of Bank Reconciliation Process
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Helps in year-end closing of accounts
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Helps the Receivable departments to send updated SOA on time
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Helps generate a more accurate and up to date balance of payables and receivables of the business
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Spots mistakes such as double payments, missed payments, calculation errors, etc.
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Detects deceitful transactions and theft
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Improves cash flow
Frequently Asked Questions [FAQ]
What is account reconciliation?
Reconciliation is a comparison of two sets of records to make sure that the cash going out of the checking account matches invoices. In simple words, it is the investigation and reviewing of the financial statements and supporting documents. It helps to close the books of accounts and enhance the credibility of internal financial statements.
How Often Should You Reconcile Your Bank Account?
Ideally, you should reconcile your bank account each time you receive a statement from your bank. This is often done at the end of every month, weekly and even at the end of each day by businesses that have a large number of transactions.
What Is the Purpose of Bank Reconciliation?
The bank reconciliation process offers several advantages including:
- Detecting errors such as double payments, missed payments, calculation errors etc.
- Tracking and adding bank fees and penalties in the books
- Spot fraudulent transactions and theft
- Keeping track of accounts payable and receivables of the business
What are the services included in reconciliation?
Account reconciliation services include comparing transactions recorded internally against external activities such as:
- Bank Statement Reconciliation
- Suppliers Ledger Reconciliation/Vendor Payments Reconciliation
- Customers Ledger Reconciliation
- Intercompany Reconciliations