Bank reconciliation is the process of comparing and matching the transactions recorded in an organization’s accounting records with the transactions recorded by the bank in its statement. The purpose of bank reconciliation is to identify and resolve any discrepancies or differences between the two sets of records. Here’s a step-by-step guide for performing bank reconciliation

• Gather Documents: Collect the organization’s bank statement(s) for the relevant period and any other supporting documents, such as checkbooks, deposit slips, and bank advices.

• Compare Opening Balances: Compare the opening balance of the bank statement with the opening balance in the organization’s accounting records. Ensure that they match.

• Compare Deposits: Review the deposits recorded in the bank statement and compare them with the deposits recorded in the organization’s accounting records. Match the dates, amounts, and descriptions.

• Compare Withdrawals: Similarly, compare the withdrawals (such as checks, electronic transfers, and fees) recorded in the bank statement with the withdrawals recorded in the organization’s accounting records.

• Identify Discrepancies: Note any differences between the bank statement and the organization’s records. These differences can include missing transactions, errors, timing differences, bank charges, or outstanding checks.

• Reconcile Ending Balances: Compare the ending balance on the bank statement with the ending balance in the organization’s accounting records after making the adjustments. The two balances should match.

Document Reconciliation: Prepare a bank reconciliation statement or report that summarizes the reconciliation process, lists the reconciling items, and explains any outstanding differences.