Bank Reconciliations

What is bank reconciliation? It is a verification process that ensures that your bank statement reflects what your records show. Sometimes banks make mistakes and cash someone else’s cheques out of your account or charge you fees you were not notified about. You need to notify the bank promptly of any errors. Businesses who don’t perform regular bank reconciliations may find themselves overdrawing their accounts – you may forget you wrote a cheque to someone 5 months ago for $1500, they held on to it and cashed it today and caused your account to go into overdraft or worse – the cheque bounced. Performing regular bank reconciliations helps you keep a good credit record.