Bank Differences

Differences – But Why?

Bank reconciliation process is targeted to validate the bank balance in the general ledger and explain the difference between the bank balance shown in an organization's bank statement. Learn the reasons for existence of differences between the two.

Reason for Differences:

Such differences may occur, for example, due to following reasons:

1. Cheques Not Presented: A cheque or a list of cheques issued by the organization has not been presented to the bank.

2. Banking Transactions: A banking transaction, such as a credit received, or a charge made by the bank, has not yet been recorded in the organization's books.

3. Errors: Either the bank or the organization itself has made an error while recording transactions.

4. Deposit in transit: Cash and/or checks that have been received and recorded by an entity, but which have not yet been recorded in the records of the bank where the entity deposits the funds.

5. NSF check: A check that was not honored by the bank of the entity issuing the check, on the grounds that the entity's bank account does not contain sufficient funds. NSF is an acronym for "not sufficient funds."

Summary:

Differences may occur, between bank statement and bank account in your ledger. Some examples are following:

  1. Cheques not presented
  2. Banking transactions & charges
  3. Errors
  4. Deposit in transit
  5. NSF check
Differences – But Why?

cashmgmt

Related Links

You May Also Like

  • Treasury Management - Functions

    Treasury Management - Functions

    Treasury management has become an specialized function. Treasury function helps in managing the Risk-return profile as well as the tax-efficiency of investment instruments. In larger firms, it may also include trading in bonds, currencies and financial derivatives. Learn about the various tasks, activities and imperatives, undertaken by treasuries in in today's context.

  • Treasury Management – Why?

    Treasury Management – Why?

    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.

  • What is Cash

    What is Cash

    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.

  • Cash Management Float

    Float

    To understand cash management, one must understand FLOAT. Float is the most critical component in Cash Management. Learn about cash float in this article.

  • Bank Differences

    Differences – But Why?

    Bank reconciliation process is targeted to validate the bank balance in the general ledger and explain the difference between the bank balance shown in an organization's bank statement. Learn the reasons for existence of differences between the two.

  • Treasury Management - Benefits

    Treasury Management - Benefits

    Effectively using treasury management with cash management and trade finance products brings tangible benefits to both corporates and financial institutions. Let us discuss some tangible benefits of treasury function.

  • What is Account Reconciliation?

    What is Account Reconciliation?

    Before you understand the Bank Reconciliation Process it is important to understand what is account reconciliation and why it is carried out.

  • Automated Clearing

    Automated Clearing

    In automated clearing, Bank statement details are automatically matched and reconciled with system transactions. Learn how this process works and what are the perquisites to enable the same.

  • Clearing – A business concept

    Clearing – A business concept

    Unravel the mystery behind clearing. Why we use clearing accounts. Find the relevance of word "Clearing" in business context.

  • Collection Float

    Collection Float

    Collection Float is the time spent to collect receivables. Collection float is the sum total of time taken by Invoice Float; Mail Float; Processing Float and Availability Float. Explore more!

Explore Our Free Training Articles or
Sign Up to Start With Our eLearning Courses

Subscribe to Our Newsletter


© 2023 TechnoFunc, All Rights Reserved