Most 5 star CPA Google reviews in Canada
Helping Canadian businesses beat the odds!
Vancouver accounting firm teaches that a lot of business owners are strapped but they have signed up for the fact that they are going to have to make very essential business decisions in a very daily basis.
However, with new business owners in particular, that do not have a good team behind them, they are going to make very significant and potential fatal errors in a lot of their cash balances.
Often times what happens is you are gonna have to deal with bank reconciliations. The bank reconciliation will start with a statement balance. The statement balance, according to Vancouver accounting firm should be shown on top of the page. As well, it should be exactly the same balance that is in your bank statement at the same date with which it was processed.
In turn, and in between that you will have a lot of potential uncleared items. At the bottom you’ll have the registered balance.
The uncleared items or items that have not yet cleared the bank yet. In turn, that those deposits that have come in but aren’t yet showing in the bank statement are going to be eventually in that balance sheet.
Both are going to match side-by-side. They have to be the exact numbers.
Those are the ones that are definitely still outstanding and need to be dealt with. They can’t sit on that reconciliation sheet forever. You know those deposits have been booked and reasonable now all it’ll tell you at the end of the day is that the cash is available to the business.
However, if you have for example 5 $2000 and you know the been deposits have been booked and appear reasonable, you have to be careful that any of the other bank statements have been cleared. If they haven’t been cleared that $500,000 may be something very different and a lot less.
Check that statement balance, says Vancouver accounting firm. Make sure that it is a very conscious decision to be chosen first and unlock it against the statement balance in the bank reconciliation.
That is a very good starting point and the first stop in a bank reconciliation is all the transactions are already booked in the account data file. With just some simple matching accounting transactions make sure that all of that data is considered for a lot of the uncleared charges which normally those checks have not necessarily been cleared.
Often what happens is unclear charges are normally the checks that are. The checks can technically be slated to be dated after six months. And after six months, technically they are not legitimate documents anymore.
That could potentially be a mistake and make sure that you deposit your checks as soon as possible can.
The majority of the cases is you’re going to have a deposit amount which is usually part of another invoice.
As well, in terms of electronic deposits those should by nature of its existence be instantaneous.
Bear with Vancouver accounting firm as they attempt to teach about a lot of bank reconciliations to the new business owner.
Often times what happens is the majority of the cases that you’re going to have the deposit amount in is actually part of another invoice and that could cause a lot of discrepancies from within your deposits and withdrawals systems.
Often times the sometimes you can have check that has booked twice and it is showing up as an outstanding check. That outstanding check in turn has never cleared. Sometimes in that case, you could’ve mailed it and they never got it.
These are often the ones that are technically still in arrears and are known to be deposits that have been booked and are technically possible and reasonable it’ll definitely be at the end of the day that cash is available to the business. It is showing a lot of what is often the case in a lot of the actual available cash.
Deposits that have come in however, says Vancouver accounting firm, have not necessarily developed into their screen yet. And have not shown up in the statement yet are exactly the same balance that is definitely in your bank statement at the same time or in the same date.
If the statement balance is as well incorrect this could be a direct deposit of human error.
It is the bank reconciliation the does not match the balance in the general ledger so do be aware as that definitely has to be considered human error and needs to be fixed. That usually as well means that there is a future transaction that isn’t cleared before that transactions date.
Often what ends up happening is the fact that there are a lot of things that have to be cleared but you are just waiting in the bank to clear them. That is why you can’t ever find them in your bank statements.
The register balance sheet in the uncleared items are items that have not yet cleared that bank yet, says Vancouver accounting firm.
Get in the fact that both of the matches have got to be matched side-by-side and the numbers have to be correct.
Make sure that you check for a lot of the checks that have not been cleared. That has to be reconciled as well. As well the statement for the same date also has to be reconciled. Often times what happens is they have to be twins of each other in terms of the checks.
If the statement balance is often incorrect, what happens is the eat statement may not necessarily be accurate as well. Despite the fact the E statement is instantaneous and will be dispersed immediately, it may or may not be accurate when it enters into one’s bank account. As well, when you string together whole bunch of outstanding charges comprised of electronic fund transfers, it is probably not necessarily an unclaimed item. It could very well just be human error, a mistake.
