The Analysis of Bank Reconciliation

It's nothing like having a plan for the unexpected." - Fontenot & Associates Solutions

The company's checking account balance in the bank records is a liability.  Thus, in the bank's records, the company account has a credit balance.  Since the bank statement is prepared from the bank's point of view, a credit memo entry on the bank statement indicates an increase (a credit) to the company's account.  Likewise, a debit memo entry on the bank statement indicates a decrease (a debit) in the company's account. 

​Customers' checks returned for not sufficient funds, called NSF checks, are customer checks that were initially deposited but were not paid by customer's bank.   How are you handling these special occurrences in review of your cash monthly?  This incident would mean your bank account has more money than it should because your customer's check was returned by their bank. 

​A great reason to have support with your bookkeeping or a "Know How" guide to support your staff with the step by steps of how to analyze and make corrections to the financials when required.