In the previous article we talked about the meaning of the account reconciliations. Now as you now the definition of account reconciliation, in this article let us see why it is carried out.
Account Reconciliations –Why?
Personnel with responsibility for Account Reconciliations hold key Controllership responsibilities. Account Reconciliations are performed for many reasons, including:
Timeliness:
To ensure transactions are timely recorded in the general ledger in the right accounting period, following the matching concept under accrual accounting.
Accuracy:
To ensure transactions are accurately recorded in the correct statutory entity.
Validation:
To identify, document, track and explain transactional differences between general ledger and sub-ledger balances and/or other independent sources. In case of bank reconciliation, general ledger balance is validated against the bank statement.
Controls:
To identify and guard against fraudulent activity, identify errors and reduce losses.
Improvement:
To conduct root cause analysis on any operational defects identified and execute process improvement projects to address them
Introduction to Cash Clearing Process
Unravel the mystery behind clearing accounts. Learn why clearing accounts are used in finance and accounting. Learn why so many clearing accounts are defined in ERPs and Automated Accounting Systems.
Disbursement Float is the time taken from payment creation to settlement. Collection float is the sum total of time taken by Payment Float; Mail Float; Processing Float and Availability Float. Learn more!
Before we dive into cash management, let us fist understand what we mean by cash and what constitutes cash in context of cash management process.
Introduction to Bank Reconciliation Process
These set of articles provide a brief introduction to Bank Reconciliation Process. This topic not only discusses the meaning of bank reconciliation process but also discusses how this process in handled in new age ERPs and Automated Reconciliation Systems.
Learning objectives for this lesson are: Meaning of Order to Cash Process; Sub Processes under Order to Cash; Process Flow for Order to Cash; Key Roles & Transactions; Key Setups/Master Data Requirements.
Have you ever wondered what is actually a Bank Statement and why it is needed. What is the information that is available in a bank statement?
What is Invoice to Cash Process
In this article, we will explore the business process area known as; Invoice to Cash; Also known as I2C. Learning objectives for this lesson are: Meaning of Invoice to Cash Process; Sub Processes under Invoice to Cash; Process Flow for Invoice to Cash; Key Transactions Fields; Key Setups/Master Data Requirements.
Cash Clearing – Accounting Entries
The Cash Clearing process enables you to track amounts that have actually cleared your bank. Learn the steps and accounting entries that gets generated during the cash clearing process.
Bank Reconciliation is a PROCESS to Validate the bank balance in the general ledger With Bank Statement. Learn the bank recon process.
In automated clearing, Bank statement details are automatically matched and reconciled with system transactions. Learn how this process works and what are the perquisites to enable the same.
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