Reconciliations play an important function with managing the accounts of the organisation but often they are overlooked and not completed on a regular basis.

The importance of reconciliations is that they provide a greater level of confidence that the total figures contained in the accounts and financial reports are correct and accurately reflect the transactions they relate to.

For example, if you are not completing reconciliations, then look at any figure in your latest finance report and ask yourself “how do you know this is the correct figure?”  Furthermore, as discussed in the previous post titled:  Budget hits and losses understanding why variations occur allows you to prepare a more accurate and useful budget.

In addition, by completing reconciliations it allows you to identify mistakes in relation to allocation of accounts.  There may be duplicate transactions or incorrect amounts which have been entered.  One other critical reason why reconciliations are important is that they can help to identify fraud.  Transactions can be checked off against bank statements or transaction listings and if anything does not look correct then the original documentation relating to the transaction can be reviewed.

As a minimum you should be completing bank reconciliations.  This confirms the accuracy of the bank account balances as it compares, or reconciles the balance in the accounting system with the cash balance on the bank statement.

This is a great feature on Admin Bandit as the bank reconciliation can be prepared quickly and with a minimum of effort.  This is a standard feature on all the packages we offer so follow the link for more information.