Bank Account Reconciliations Procedure | CSH107

Bank Account Reconciliations Procedure

The Bank Account Reconciliations Procedure outlines monthly bank statement reconciliation practices to ensure the accuracy of your bank account records.

The bank statement reconciliation procedure demonstrates how to prove out your monthly balances in the bank’s account register. The Bank Account Reconciliations Procedure applies to all bank accounts maintained by your company. (8 pages, 1845 words)

Errors or omissions can be made to the company’s bank account records due to the many cash transactions that occur. Therefore, it is necessary to prove the monthly balance shown in the bank account register. Cash on deposit with a bank is not available for count and is therefore proved through the preparation of a reconciliation of the company’s record of cash in the bank and the bank’s record of the company’s cash that is on deposit.

Bank Account Reconciliations Responsibilities:

The CFO (Chief Financial Officer) is responsible for review and approval of all reconciliations.

The Controller is responsible for reconciling all checking accounts.

Bank Account Reconciliations Definitions:

Batch – All of the day’s credit card transactions are collected into a “batch” of transactions. The batch is closed, usually at the end of the day, and the result is submitted to the merchant processor as a single “batch”.

Settlement – The processor clears the credit card transactions in the batch and the result is “settled” to the designated bank account. Settlement varies by Credit Card Company but usually occurs in 2-3 days after a batch is closed.

Processor – The processor is responsible for authorizing credit card transactions and settling each batch. The processor is also the company that one must interface with on all discrepancies or “chargebacks.”

Chargebacks – A chargeback occurs when a customer (cardholder) disputes a charge that appears on their monthly credit card statement. If the dispute cannot be resolved, the transaction is charged back to the merchant. The processor charges the merchant and returns the cardholder’s money.

Bank Account Reconciliations Procedure Activities

• Bank Statement Preparation
• Computerized Format
• Manual Preparation and Reconciling Items
• Computerized Preparation and Reconciling Items
• Adjustments and Other Troubleshooting

Bank Account Reconciliations Procedure Forms

• Sample Bank and Book Balances Reconciliation to Corrected Balance Form