Reconciliation is an accounting process which inputs two sets of same records from two different points to ensure that the recorded figures are correct and commensurate with each other. It is often considered a lengthy and tiresome activity by the accounts and finance department executives as it involves reconciliation of huge amount of data. The reconciliation work requires expertise in domain knowledge of accounting and finance and matching skills set for accurate and diligent flow of information. By verifying the accuracy of each data and record input, Corpseed account reconciliation team identifies errors and inconsistencies requiring correction, and reconciles the final balance accordingly.
When to Reconcile?
Corpseed Reconciliation Team performs the reconciliation services every month when the bank statement is issued for a particular business entity. It helps in reviewing income & expenses and comparing what bank has recorded with what the company employees have recorded. We tend to prepare bank reconciliation statement every month so that it does not become a cumbersome and totally unmanageable process at the end of the financial year at the time of closing the books. Hence, we provide bank reconciliation outsourcing services to organizations that do not have relevant knowledge and consider it a tedious task.
How to Reconcile?
When a bank statement arrives, we compare transactions in the bank account to the check register of the same period. Both, the statement and the register should have same number of transactions. The purpose of preparing bank reconciliation statement is to match each line in the statement with the register.
Types of Bank Reconciliation:
- Inventory Reconciliation
- It is a process where actual physical stocks are checked and recorded in the system.
- We offer inventory reconciliation services by comparing the written inventory in records with the actual physical inventory present in the warehouse. It is considered essential for warehouse staff to keep a track of replacement items, to correctly value the inventory and to ensure that the products are available when needed.
- The In-Out register of the warehouse is accurately matched with the books. The inventory valuation method (FIFO, LIFO or any other method) prevalent in the actual course of action is reconciled with the books.
- Vendor Reconciliation
- The reconciliation of accounts payable is the process of matching outstanding vendor balances to the payables amount stated in the general ledger.
- This is done to see whether the vendor is charging correctly for the products or inventory you have received. This is also done as a part of month end closing activity to maintain transparency in the financial statements.
- Customer Reconciliation
- The reconciliation of accounts receivable is the process of matching the outstanding customer balance to the receivable amount stated in the general ledger.
- This is done as a part of month end closing activity before issuance of monthly information system (MIS) to check for all the due payments to be received and maintain transparency in the financial statements.