What is bank reconciliation? In this article you will learn about the benefits we can get from bank reconciliation, as well as the management of a company’s treasury. Don’t miss this post!
What is bank reconciliation?
Bank reconciliation in a business environment involves an alignment and relationship between the accounting control processes of a company and the movements that have been made in the bank accounts. The ultimate aim is to detect possible errors and correct them so that they do not pose a problem for the company.
The bank reconciliation facilitates the analysis and verification of the expenses or income generated at the end of each month. It also makes it easier to check and observe that the data generated, together with the adjustments or corrections, are true to the accounts and that everything is under control.
In short, bank reconciliation gives us the opportunity to keep up to date and be clear about how the company’s accounts are doing.
What are the benefits of bank reconciliation?
There are several main reasons why bank reconciliation benefits our business:
1. Detecting errors
Bank reconciliation allows you to be up to date, therefore, it allows you to minimise errors and detect them in time. Errors cannot always be avoided, so being able to detect them in advance avoids unpleasant surprises.
2. Check movements
Reconciliation is the best tool to check that transactions, receipts and payments have been made correctly or are in good process.
3. Up-to-date accounting
Being able to check transactions also allows us to keep our accounts up to date, and to know what is happening in our bank accounts. Information is very valuable, even more so when we are talking about numbers and making decisions based on real and accurate data.
Having up to date accounts, checking movements and detecting possible errors can help us and give us security in case of inspection. How? By reflecting and having real, up to date and transparent bank accounts gives us the opportunity to be safe and not run into tax problems or penalties.
5. Facilitate decision making.
We can conclude that all these utilities or benefits of bank reconciliation together provide us with data and information for more accurate, efficient and realistic decision making.
What do I need to do a bank reconciliation?
Mainly, it is necessary to have up to date accounting, normally monthly, of bank data, as well as to know the bank account statements, invoices, tickets, cheques, cash withdrawals, etc.
In order to comply with tax obligations, companies must comply with bank reconciliation on a quarterly basis, so being up to date beforehand can help us to better manage our accounts. It is true that, depending on the company, this process can be more laborious if it has several bank accounts. When recording and cross-checking accounting books, but it is not usual to find errors, but from time to time there may be a duplication of content.
Therefore, the purpose of the bank reconciliation is to verify that the accounting data is correct and properly reflected, showing a true and fair view of the company’s cash position.
How to do the bank reconciliation with Xpendor
There are different ways to do it, manually or automatically. Xpendor’s digital solution allows you to digitise this process.
The company stops writing down every movement in Excel or another tool and starts checking and obtaining the profits and benefits demonstrated above. Xpendor’s expense note management software has a card reconciliation module that compares the amounts of expenses entered with the card payment statement, checking the date and supplier to detect possible errors or unjustified expenses.
Do you want to know our digital solution? If you have any doubts about how to manage travel expenses, call us on 919 917 009, or leave us your details here and we will call you back. Digitalise your company expense notes and avoid errors in travel management!