The Cash Questions

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Blog / Accounting
The Cash Questions
The Cash Questions
What is the method of preparing a Bank Reconciliation Note? One of the most frequently asked questions we receive in the comments on our blog and in our emails. It is also one of the most frequently asked questions by accountants in financial departments within companies and various business establishments, as well as one of the most frequently asked questions by those interested in accounting in general about cash.
So in this new article on the "Fekra Programming" educational blog, we will explain to you what is a bank settlement note? And how accurately can a Bank Reconciliation Note be prepared for your company or organization?
Let’s explain the concept of a bank settlement note first…
What is the concept of bank settlement note?
Bank settlement note is a term referred to a financial or accounting statement prepared by companies, establishments, or various business establishments within their accounts and financial department in order to analyze and discover the difference between the balance in the bank account statement and the balance that exists or appears in the records of the company itself. Represented by h/ the bank, in order to finally reach the correct balance between the bank and the facility.
As the companies carry out a process of matching the balance appearing in the bank account statement with the balance represented in the bank and appearing in their financial records, then because of the time differences in proving the financial operations, it is rare for the two balances to match, that is, we rarely find the balance appearing in the account The bank is identical to the book balance recorded in the records of the company or establishment.
Because of the mismatch between these two balances, companies and establishments resort to preparing a bank settlement note to reach the correct balance.
This was what was meant by the bank settlement note, and why companies, business establishments, and commercial or service establishments resorted to preparing it. But, how can a Bank Reconciliation Note be prepared? This is what we will learn in the next paragraph.
How is a Bank Reconciliation Note prepared?
Preparing a Bank Reconciliation Note is not a difficult matter or task, as you can prepare it in simple steps.
Only the accountant of your company needs to print the bank account from the bank itself, and then print the bank account statement that is in the records and books of the establishment for the same year or fiscal period.
After printing the balance in the two accounts (the bank and the company's books), all financial transactions in the two accounts must be matched by value and date in order to ensure that they are linked to the same transaction and belong to the same beneficiary.
After making the reconciliation, the accountant will, of course, discover that some mathematical operations appear in one of the two accounts and are not recorded in the other account, and accordingly he must write or include them in the bank settlement note in order to make the accounting entries required to match the bank account.
In the event that the accountant of your company succeeds in finding and including the documents related to the financial operations related to the differences in the statement of account, then he must prove the journal entries immediately.
If he fails to provide it, he must update the bank settlement note and keep it in the bank reconciliation file; So that he can later review the bank account and determine the reason for the difference or differences in the balances.

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Category: Accounting

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