Business terms and jargon
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Bank Reconciliation
This is an accounting statement that reconciles the cashbook and the bank statement. When a payment is received e.g a cheque, it is recorded in the cashbook. The cheque is then put into the bank account and a few days time the amount will appear on the bank statement. When the cheque is received and recorded in the cashbook the cashbook balance will then be different to the bank statement on that date. The time delays in trancactions and the time that it takes to show on the statements will mean that the two books will have differant balances. Also bank interest will be on the statment and bank transfers that will not be recorded in the cashbook. A bank reconciliation reconciles both balances.
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