Procedures For Bank Reconciliation: Company Steps To Identify Fraud

Procedures for Bank Reconciliation (Grand Volkan Image Olmez - Unsplash)

YOGYAKARTA - Errors in recording financial statements in a company are often encountered because of various triggers so that reconciliation needs to be carried out, for example bank reconciliation. Bank reconciliation is a process of matching the company's cash balance with actual cash from bank reports to reduce errors that may occur.

This reconciliation process will provide an overview of what the company has tried for a certain period of time. Instead, the process is carried out in several stages discussed in this section.

What Is Bank Reconciliation?

A document comparing the amount of balance in detail to verify the company's report in the ledger with the information of the bank report. This bank report is in the form of a bank account. Applying reconciliation to two accounts helps to identify which one is done by the accounting team.

Bank reconciliation is carried out regularly to ensure the company's cash records are carried out appropriately. When there are differences found, the next adjustment journal will be carried out in conjunction with valid supporting facts.

Not only that, this matter also helps in knowing fraud and manipulation.

A bank reconciliation report can be made, a balance sheet reported by the bank compared to a business ledger. The following is a procedure when conducting bank reconciliation, namely:

1. Compare Company Balance

Match the business balances that have been recorded with the existing bank reports. Compare each transaction recorded with a bank report such as a bank account that the company gets each month when it has a checking account.

After the identification is carried out, mark each item that arises from the two notes if there are similarities or differences.

2. Adjustment of Unregistered Bank Reports

Adjust the balance in the bank report to the company's final balance. Adjustment of the final cash balance to bank reports as cash in and out and checking has also been recorded in the ledger or not. At the time it has not been recorded, it may be due to a clearing process or also a time difference.

3. Unregistered Cash Adjustments

The next step is to get used to cash balances in business accounts. Make adjustments to business accounts, for example, adding interest or reducing monthly expenses.

- Bank costs are service costs and costs reduced in banking processing from checking checking accounts.

This can include monthly payments or withdrawal payments from accounts, deducted from accounts. If you get interest from the bank account balance, make sure it is added to the cash account.

- Nominal input errors in cash accounts cause it is necessary to correct and adjust. Correcting errors will increase or reduce the amount of cash in the book.

4. Adjustment of Cash Account Errors as well as Bank Reports

Various mistakes or fraud can also be known through bank reconciliation, although they do not often occur, but this possibility can occur. Errors here include incorrect data input or other negligence, which, for example, is wrong in writing down the number of transactions or also the number of purchase items of goods.

5. Correcting Cash Accounts in the Big Book

After adjusting the balance to each bank and bookkeeping, it is necessary to check the amount that should be the same. If it is still not the same, you must repeat the reconciliation process again. On the other hand, when the balance is the same, business needs to prepare journal entries to adjust the balance per book.

Journal adjustments are the final part in the process of reconciliation of cash accounts in the ledger. Bank reports can be categorized as being reconciled at the time of adjusting the bank's cash balance is the same as adjusting the cash balance by the company.

At that tempo you need to read: 'How to Count Interest Deposits' so you don't get confused When later offered similar programs.

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