Account Reconciliations– Why?
In the previous article we talked about the meaning of the account reconciliations. Now as you now the definition of account reconciliation, in this article let us see why it is carried out.
Account Reconciliations –Why?
Personnel with responsibility for Account Reconciliations hold key Controllership responsibilities. Account Reconciliations are performed for many reasons, including:
Timeliness:
To ensure transactions are timely recorded in the general ledger in the right accounting period, following the matching concept under accrual accounting.
Accuracy:
To ensure transactions are accurately recorded in the correct statutory entity.
Validation:
To identify, document, track and explain transactional differences between general ledger and sub-ledger balances and/or other independent sources. In case of bank reconciliation, general ledger balance is validated against the bank statement.
Controls:
To identify and guard against fraudulent activity, identify errors and reduce losses.
Improvement:
To conduct root cause analysis on any operational defects identified and execute process improvement projects to address them
Related Links
You May Also Like
-
Introduction to Bank Reconciliation Process
These set of articles provide a brief introduction to Bank Reconciliation Process. This topic not only discusses the meaning of bank reconciliation process but also discusses how this process in handled in new age ERPs and Automated Reconciliation Systems.
-
Cash Clearing – Accounting Entries
The Cash Clearing process enables you to track amounts that have actually cleared your bank. Learn the steps and accounting entries that gets generated during the cash clearing process.
-
Bank Reconciliation is a PROCESS to Validate the bank balance in the general ledger With Bank Statement. Learn the bank recon process.
-
What is Invoice to Cash Process
In this article, we will explore the business process area known as; Invoice to Cash; Also known as I2C. Learning objectives for this lesson are: Meaning of Invoice to Cash Process; Sub Processes under Invoice to Cash; Process Flow for Invoice to Cash; Key Transactions Fields; Key Setups/Master Data Requirements.
-
So many codes in the lines that are there in a Bank Statement. It contain lots and lots of meaningful information that can help automated many tasks. Explore more!
-
Although there is no straight forward answer to the question, how to best organize a treasury function, this article provides an generic view of the way large MNCs creates departments or sub-functions within the treasury function.
-
Before we dive into cash management, let us fist understand what we mean by cash and what constitutes cash in context of cash management process.
-
Treasury has increasingly become a strategic business partner across all areas of the business, adding value to the operating divisions of the company. Managing activities that were traditionally carried out within the general finance function. Learn about the drivers for this change.
-
Why enterprises need cash management. What is the purpose of having a well defined cash management process?
-
Many different accounts are used in finance. Understand the representation and nature of clearing account in context of accounting, finance and ERP Systems.
