Importance Of Bank Reconciliation For Multinational Employees (Lab Report Sample)
Choose a topic in your major field involving a mechanism, method, machine, or theory that could be used to solve a specific problem or do specific job. The paper will then recommend the best solution to the problem or to do the job.
My major is accounting.
I need two extra pages, one for work cited another one for title page
IMPORTANCE OF BANK RECONCILIATION FOR MULTINATIONAL EMPLOYEES
Accountant and business consultant
This paper reviews the attempts to avoid experiencing differences in bank reconciliation. The difference is likely to occur due to bank charges which are included in the bank statement but the company finds later via a bank statement. Additionally in order to avoid creating difference in the banks records and the company’s it is required of the company to always view the bank statement online in order to be in update with the account balance available in the bank. This paper seeks to explain the best methods of conducting bank reconciliation.
Most companies have general ledger account which contains information that is used to prepare financial statements. It holds all the transactions either in written form, checks or receipts that involves its checking account. A company’s checking account is created to be useful in the process of checks and deposits. On a monthly basis, the bank ensures that the company receives a bank statement via an email which entails all the information about any deposits done in the recent month as well as the bank account balance. When the company receives its bank statement, it verifies whether the amount reading on the bank statement is compatible with the company’s cash account record.
Bank reconciliation involves matching balance between the balance shown in an organizations bank statement and the amount in the accounting records of the organizations. The differences mainly occur if the organization issues a check, and it’s not presented to the bank or if a bank or the organization made an error itself. The purpose for reconciliation is to ensure that the money leaving an account matches the actual money spent (Wind, Kyle).
This report shows the problems encountered in bank reconciliation. By being in update with the bank transactions will help avoid any financial differences of the recording account.
The problems experienced in bank reconciliations
The system of accounting mainly holds records of the assets of the company. Hence, most companies prefer doing the reconciliations on time to avoid any kind of fraud. The absence of having timely and proper cash reconciliations increases the risks of error or fraud (Ellery & J.p). According to recent reports, most company’s and financial institutions experience check frauds which cost $20 billion annually. Several financial institutions still follow the traditional approach, whereby the reconciliation is done manually and compared. This process is tiresome since the records are manually entered, then the information is compared, later analyzed and finally the information is stored. The process may lead to several errors due to high increase of data. With more complex calculations and new asset types, major challenge in reconciliation analysis is experienced; hence the need to improve the existing systems in order to comfortably accommodate the reconciliation deals.
Increase in transaction affairs brings the need of essential solutions in data management in order to have a smooth flow in the area of reconciliations. Immediately a firm deposits a check in to bank, it is entered on the debit side of the bank column of the cashbook and increases the balance as per the cashbook. The bank then credits the firms account on realizing the checks. The process will then take a few days in clearing of the checks. If a firm deposits a check and gets dishonored, the bank debits the firms account without the company knowing and the firm will only record the same when it receives the information from the bank and this might cause a difference.
A company can write hundreds of checks a month, and make sever...
- Importance Of Bank Reconciliation For Multinational EmployeesDescription: Your major field involving a mechanism, method, machine, or theory that could be used to solve a specific problem or do specific job...5 pages/≈1375 words | 3 Sources | MLA | Communications & Media | Lab Report |