Bank reconciliation is one of the key control tools in accounting. It's an effective method for determining your organization's true cash position, corresponding to account 512 in the chart of accounts.
- What is bank reconciliation used for?
- When should you reconcile?
- How to reconcile in the software?
- Setting up the reconciliation tool
What is bank reconciliation used for?
When you receive your bank statement, you need to verify that the transactions listed on it match the entries recorded in your accounting system.
This verification step is called "bank reconciliation." The benefit of reconciling your bank statement is confirming that the cash balance in your accounting system matches what your bank reports.
Bank reconciliation is not required. However, we strongly recommend it. It helps you spot and correct any discrepancies between your accounting records and your bank data.
When should you reconcile?
It's tempting to save reconciliation for the end of the year or the month before your accounting period closes.
That said, reconciling every month as soon as your bank statement arrives makes life much easier. Staying on top of it saves you time and prevents year-end scrambles: it's a lot easier to track down an invoice from two weeks ago than one from a year ago.
How to reconcile in the software
The accounting software guides you through this verification process.
Access our complete guide to bank reconciliation here.
Where do I perform my bank reconciliation?
In the Accounting module, you can perform your bank reconciliation from the Bank reconciliation page (Accounting > Bank reconciliation):
Two reconciliation methods available
There are two reconciliation methods available: manual reconciliation using a paper bank statement, and reconciliation by importing your bank transactions directly into the software.
You can choose your preferred method on the Import from your bank page:
Accounting > Bank reconciliation > Import from your bank
- Manual bank reconciliation
This is the traditional reconciliation method. It involves comparing your book entries recorded in the software directly against the paper bank statement provided by your bank.
For example, you pull up your January bank data and match each transaction on your bank statement to the corresponding entry in your accounting records. You then point the entries that match.
For more details, see our article on manual reconciliation here.
- Import bank statement from your bank
You import all the transactions appearing on your bank statement directly into the software. You can then compare your book entries against the imported bank transactions, all within the tool.
Bank transactions can be imported automatically or manually.
To learn more, see the article How to choose your reconciliation method.
Setting up the reconciliation tool
The first time you open the Bank reconciliation page, you'll need to configure the reconciliation tool before you can start using it.
The bank reconciliation steps are as follows:
- Choose your reconciliation method
- Create your first statement and manage your statements
- Perform your bank reconciliation
- Validate a statement
Want to go further?
Your complete guide: bank reconciliation in Springly
This guide combines theory and practice.
With tips and screenshots, it walks you through bank reconciliation in Springly. Enjoy!
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