What is a Bank Reconciliation? And why does it need to be done?
A bank reconciliation is the process in which you match and compare transactions from your accounting records with those on the bank statement. Reconciling the checking account on a regular basis ensures that the amount in your checking account is consistent with the amount shown on the bank statement and that the bank has not made any errors. A bank reconciliation needs to be done on a monthly basis (or whenever the statements are issued). This guarantees that all transactions are correct and have been recorded and that the bank has not made any errors for the specific time period At Stoner, Jeffers & Associates we recommend that your bank accounts be reconciled on a regular basis. This will reduce the cost to you at income tax time. We cannot proceed with any accounting unless the bank accounts are all reconciled. This includes checking and savings accounts, along with credit cards and loans if necessary.
