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Bank reconciliation

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To begin your bank reconciliation, first complete these first four easy steps. Go back one step if you think you may have gone wrong.

Step 1 | Compare entries in your Bank Paid Analysis Book with items paid out indicated on your bank statement. In your Bank Paid Analysis Book put a tick against each cheque payment that appears on your bank statement. Now place a tick against the corresponding payment on your Bank Statement.

Step 2 | In your Bank Received Analysis Book, put a tick in the ‘Banked’ column for each deposit indicated on your Bank Statement. Now place a tick against the corresponding deposits on your Bank Statement.

Step 3 | Don’t forget to check and tick – both on the Bank Statement and in the Bank Analysis Books – outstanding items from the previous bank reconciliation which have now cleared the bank.

Step 4 | Now look at the bank statement. Are there any items without a tick? If there are any, they should be entered in the corresponding Bank Analysis Book. Such items may include interest, bank charges, direct debits and standing orders. Once entered in your Bank Paid Analysis Book tick these items off on your Bank Statement.

When these four steps have been completed, all items on your Bank Statement will be in your Bank Analysis Books.

Step 5 | First rule off the Bank Analysis Books and add up the columns. Then ‘crosscast’ to ensure that the adding-up is correct. Now fill in a Bank Reconciliation Form (there is a model here). Calculate the Bank Book Closing Balance for the month as follows:

Balance brought forward (b/f)

+

Receipts for the month


Payments for the month

=

Balance carried forward (c/f)

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Last updated: Mon, Mar 31 2008 - 02:22:08 PM

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