Bank Reconciliation is a key accounting reconciliation to ensure that Company’s Working-Capital is closely monitored. Company Directors are usually interested in knowing the Cashflow position. Thus, the importance of having a robust bank reconciliation process is paramount to allow timely business decision making.
For SMEs – Small & Medium Size Company’s the importance of understanding their cashflows is critical. Given that they may not have access to intercompany loans from their Parent & would usually have to raise debt finance to finance any new projects & business endeavours.
They may need to arrange for debt-finance in order to acquire new assets for the business. Banks usually ask for a cashflow forecast. When preparing these forecasts, Accountants would normally review the Bank reconciliation to get an understanding of the key inflows (receipts) & outflows (payments) to run the business activities.
As a Cashbook Specialist your role is therefore of a watch-dog nature. This is best achieved by reconciling the bank accounts with Company cashbook. Generally, Accountants working in the SMEs prepare daily/weekly bank reconciliations.
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