When businesses can easily account for discrepancies, there's probably no need to worry, but if it takes more time to find and reconcile discrepancies, there may be more significant issues that need to be dealt with.
Fremont, CA: When reconciling a business bank account, compare the internal financial records against the records provided to the organization by the bank. A monthly reconciliation can help identify unusual transactions that could be fraud or accounting errors.
Businesses need to compare the internal record of transactions and balances to the monthly bank statement to reconcile accounts, verify transactions individually, ensure that the amounts match, and recognize differences that need further investigation.
An organization's accounting system should include all the internal transaction data or keep records in a check register. The bank can offer online access to the account, enabling the business to view and download transactions regularly to compare. It helps find administrative concerns that need to be focused.
Proper processes for managing bank transactions know how much cash is available in the account; avoid bounced checks to partners and suppliers. It can also ensure every transaction gets entered into the business accounting system correctly, catch bank errors, knowing if customer payments have bounced or failed and if any actions are needed and keep track of outstanding checks and following up with payees.
For larger businesses or situations with a significant risk of fraud, it is essential to reconcile bank transactions often. Bank accounts can also integrate protection to minimize fraud and other threats.
Here are a few signs of fraud that needs to be focused on when reconciling transactions in the businesses' bank account:
• If legitimate checks that the bank issued are duplicated or changed, it will result in more money leaving the checking account.
• If checks were issued without an authorization.
• If there are unauthorized transfers out of the account or if anybody has made any unauthorized cash withdrawals.
• If the bank account has any missing deposits.
See Also: Top AR/VR Consulting/Service Companies
