Before you know what a bank collation is, it sounds like a tedious task. It’sIt’s easy to dismiss something that sounds mediocre, like a business owner who has too much responsibility and too little time. Unfortunately, bank adjustments cannot be ignored. This post gives a brief overview of bank collation and explains why it is an important part of ongoing accounting and tax services. Let’sLet’s start the party!
What is SME Bank Verification?
Bank collation is a simple process. Your accounting outsourcing companies are involved in various transactions with the money that goes in and out every month. All of these transactions should be recorded in an accounting program such as QuickBooks or Xero. In addition, such transactions will be settled through your bank account a day or two after they are made. The bank reconciliation process ensures that the information on your bank statement matches the information displayed in your accounting software.
What is included in the bank verification statement?
Once the bank matching process is complete, you can create a bank matching statement. This document summarizes the adjustments and describes the discrepancy between the bank balance and the cash on hand in the accounting system. Bank matching statements typically have the following items:
- Bank deposit balance: The balance shown on the bank statement is recorded with the date of this balance.
- Additions and deductions: Transportation credits or checks that the bank has not yet received will appear on your account statement and will be corrected from your balance on your account statement.
- Banking business: The adjustment also shows events on the bank side and have not yet been considered in the company’s books. Examples include funds collected by banks on behalf of companies and fees from accounts payable to banks.
- Adjusted cash on hand: Here, the bank collation shows that the books are normal. The adjusted cash balance must match when all outstanding transactions are considered.
The most important tips for bank settlements
Before concluding this talk, I would like to give you three simple guidelines on making bank collation an important part of the accounting process.
- Make it a habit: Bank collations should be performed regularly. This means once a month for most small businesses, but you can adjust this schedule to suit your needs.
- Make sure your book is up to date: If you need to update the internal books of the previous month before comparing these records with the bank’s statement, it will take much longer to complete the bank’s reconciliation.
- Please take your time: When you settle yourself, take the time not to hurry. A quick approach greatly increases the chances of error.
Final Thoughts
Understanding the significance of bank reconciliation and scheduling time to perform it are two different things. All the drivers in the world won’t make time magically appear to check over your bank statements and resolve any concerns.
FinBridge enters the picture at this point. Bank reconciliation is just one of the numerous business bookkeeping services we offer to take this and other monthly tasks off your desk. Get in touch with us right away to learn more!