Chapter 15

Reconciling Your Bank Accounts

In This Chapter

  • Valuing the importance of bank reconciliations
  • Preparing to do your bank reconciliation
  • Reconciling your bank account
  • Checking things out when things don't check out
  • Clearing up items that haven't cleared

If you like to know to the penny what's in your bank account, you're reading the right chapter. Reconciling your bank accounts normally forms part of your monthly accounting routine. Running through the bank reconciliation process gives you a thorough review of your bank statements and provides a good opportunity to investigate any unusual or incorrect transactions. As a result, you're fully aware of the financial transactions flowing in and out of your bank accounts.

Recognising Reasons to Reconcile

Performing a bank reconciliation requires you to check you've matched all the bank transactions in Sage against the entries on your bank statements. Ultimately, you should be able to tick off every item on your bank statement against a corresponding entry in Sage.

Most businesses have at least one current account, a deposit account, a business credit card, and a petty cash tin. Each separate account needs statements of one sort or another. Sage assumes you have all of these accounts and provides defaults for each account, which you can rename or add to as required. (Refer to Chapter 3 for the low-down on amending accounts.) Additionally, Sage includes a building society account and credit card receipts account as default, ...

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