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Bank Reconciliation Calculator

The Bank Reconciliation Calculator allows you to explain the difference between the bank balance shown in a bank statement and the corresponding amount shown in your own accounting records.

Bank Reconciliation Calculator
Balance From Your Check Register
Ending Balance Shown on Your Statement
Total Deposits
Total Withdrawals
Bank Reconciliation Calculator Results
Adjusted Ending Statement Balance
Statement
[ 2 Votes ]

Snapshot: What causes differences in balance on Bank Reconciliation?

Bank Reconciliation Calculator: This image shows a company director calculating the reconciliation of accounts manually. The Bank Reconciliation Calculator allows you to explain the difference between the bank balance shown in a bank statement and the corresponding amount shown in your own accounting records.

It is not unusual for their to be discrepancies in the balance when completing bank reconciliation calculations, particularly in businesses with multiple transactions. Typically, balance discrepancies are caused by:

  • Cheques (check US - EN) issued/received which have not been presented to the bank or cleared into the account balance
  • Banking transaction(s) including credit received/ charge made by the bank, which has not yet been recorded.
  • Banking errors - transaction(s) not recorded or recorded incorrectly
  • Accounting error - transaction(s) not recorded or recorded incorrectly

Ascertain Errors in Your Accounting Statements Using a Bank Reconciliation Calculator

Accounting is a very important function in the operation of any company. Though there may be many complications when matching balances, it is essential to take relevant measures to avoid any discrepancies.

Bank reconciliation is the process that matches the cash balance on a company's balance sheet with the corresponding balances in the bank account statements. This process helps ensure the accuracy of a company's accounting records when performed regularly.

The definition and importance of reconciliation

The bank reconciliation confirms that the accounts in the general ledger are complete, accurate and most of all consistent with the bank statements. This is useful for explaining the difference between two financial records. Discrepancies at some level could be tolerable as they occur due to the timing of payments and deposits.

The unaccounted discrepancies are a sign of inaccurate accounting practices or perhaps warning of fraudulent transactions. It is a good idea to perform reconciliation at the end of every quarter or at least a year.

How to use the calculator to determine the accuracy of your accounts

The reconciliation calculator is easy to use. You will see the following fields that require your inputs to get the results:

  • Balance from your check register: This is the document that is kept and maintained by the firm for maintaining records of cash transactions.
  • Ending balance shown on your statement: Enter the ending balance that is reflecting on your bank account statement.
  • Total deposits: The total amount of deposits made in a period for which the reconciliation is happening, i.e. Quarter or a year.
  • Total withdrawals: The amount of total withdrawals made in the same period.

On the basis of the above inputs the calculator will provide you with the adjusted ending statement, balance amount and you will know if it is less than or more than your current account balance.

The Bank Reconciliation Calculator designed by iCalculator meets your accounting needs immaculately. You can use the results from the calculator to create and improve awareness about discrepancies relating to accounts with just a few entries & clicks, no need for manual math calculations. Inferences drawn based on the calculator's results will show you if your accounts department is working accurately or you need to take actions to make some improvements. And, the best part is, it's online and available at all times, to provide you accurate results. Just be sure to enter the correct numbers.

Advantages of bank reconciliation

  • Identifying theft of fraud: Account reconciliation enables you to keep an eye on your statements, the fraud or theft could be from your accounting department or could be happening at the bank. Taking proactive care of this kind of situation is better than looking for a cure later.
  • Make better financial plans: Expanding or improving your business requires budgeting and limiting your expenses. While doing reconciliation, you maintain awareness of your spending, and you can start making better financial plans like saving for expansion.
  • Banking or billing errors: Identified banking and billing errors could be reported and resolved immediately, which makes a regular reconciliation important. It is far easier to deal with issues that arise within a few days or weeks rather than months after they occur.
  • Records for tax and compliance: Reconciliation ensures your accounts are accurate and well in place. This is crucial when filing income tax returns, reconciling your accounts will enable you to file returns accurately and within the time limits.

Problems with bank reconciliation

There are several problems that may arise while reconciling bank accounts, these include:

  • Uncleared checks (cheques UK - EN): There could be some checks that are cleared as per your accounting records, however, they have not been presented yet or were never presented to the bank for clearing. This can create a discrepancy in the reconciliation process.
  • Clearance of Voided checks (cheques UK - EN): There can be a chance of error when long overdue checks are presented and they are cleared by the bank. This happens when the checks have been voided in the books of a company, but the banks have not been informed about the check being voided.
  • Change of the closing date: If the closing date of the bank statement and your company's accounting records are mismatched, it can create a discrepancy in reconciliation. This will happen because some transactions may be included or excluded from the bank statement. It is important when reconciling that your have equally matching periods for your accounts and bank statements.
  • Returned checks (cheques UK - EN): The status of deposit checks that are returned by the banks should be regularly updated in your company's accounts. This could cause confusion at the time of reconciliation.

In Summary

Bank reconciliation has several benefits, however, to take full advantage of the process, you must keep your records updated and consider the above-mentioned problems before beginning the reconciliation process.

Completing regular Bank Reconciliation calculations ensures that accounting audits are easier and any discrepancies which may occur are easier to identify and rectify.