Bank reconciliation procedures and process

Bank reconciliation procedures

Bank reconciliations should be done on a monthly basis and these must be duly signed for by at least two different people.

Some of the normal standard routines to be followed regarding bank reconciliations are as follows:

  1. Ensure that all bank statements for each bank account are at hand before attempting the reconciliations
  2. Details from the source documents are processed correctly in the cash book to minimize time spent on the bank reconciliation
  3. References on the Cash book must be consistent with those that appear on the source documents
  4. Journalize bank debits/credits in the same month they occur
  5. Review outstanding cheques older than three months
  6. Use reference appearing on the bank statement to cross-reference outstanding items on the reconciliation
  7. Investigate long standing items on the reconciliation and if necessary write back items that are not likely to be cleared (Cheques that are outstanding for more than 6 months are regarded as stale and must be reversed)
  8. Once the reconciliations are complete, they should be signed off at least by the Accountant, paying particular attention to long standing deposits and cheques if any
  9. Bank statements must be filed together with the bank reconciliations
  10. Bank reconciliations should be written in ink and not pencil to minimize erasure.

Bank reconciliation process