If biting an elaichi while eating biryani is frustrating, so is finding a mismatch in your book of accounts even after recording all the transactions!
Mismatches don't pop out suddenly. They just hide behind granules of transactions all the time. Accountants reconcile bank statements with the accounting records and catch these culprits wearing the masks of bank charges, uncleared and cleared cheques, and so on.
The bank reconciliation statement is a final financial report prepared to match the companies' financial records with the bank transaction statement. Companies prepare BRS daily, weekly, or fortnightly to keep their books accurate with the different BRS format. Then again, there are a few who don't, and end up suffering. If you are the former, you should reconcile from day one with the right format for bank reconciliation statement.
Prepare BRS in a click
Every accountant has just one wish: not a single penny should go out of their sight. At times, the price paid to achieve it is incomparable. Matching hundreds of e-statement entries with books of accounts tests the patience of matchmakers, here, accountants. Simply put, it demands a huge amount of manual effort, as they are prone to errors.
Tech providers understood the stress and automated e-statement reconciliation with accounting software. From then on, tech-equipped accountants started doing wonders with reconciliation statement format.
Waving goodbye to errors, screen switching (between the BRS sheet and the e-statement), and rechecking
Identifying the missing entries in the book of accounts with a click
Saving up to 90% of the efforts spent on reconciliation
By the way, those are the top three reconciliation benefits of preparing BRS with accounting software, enjoyed by the customers of Gofrugal
Cheques issued would not have been cleared by the bank. If the status had not been updated in the books, then mismatches would emerge. At times, the receiver would have forgotten to deposit the cheque too.
Until you check bank e-statements, you will not have any clue about these incidents. Banks don't notify these via SMS, either.
Cheques received from a party or contra cheque transactions would not have been cleared by the bank. Forgetting to update these will cause chaos in your books.
To err is human. If the cleared cheque date in your books is different from the actual cleared date, especially in the case of post-dated cheques, then it's the same as losing your mobile phone in a crowded place. You have to depend on divine luck to locate it.
Even after recording all the payables and receivables, the above will not let your actual bank balance in the e-statement match the bank balance as per your books. Apart from catching these culprits, preparing a BRS will help in identifying stale cheques and tracking every penny that moves in the company.
The above situations are terrorising when they actually happen. As hackneyed as it sounds, prevention is always better than cure.
The Auto Bank Reconciliation Statement (BRS) assists in downloading the bank e-statement and can be uploaded directly into the accounting software. Entries made in the software will get matched with the e-statement entries uploaded as a statement, and the cleared date will be updated automatically.
Know how
Gofrugal went a little further and partnered with ICICI Bank to simplify banking operations. A customer of both entities can download the e-statement within the software, and all it takes is one click to reconcile and find out the mismatches. The effort in handling the mismatches has become negligible with this integration.
Know howBank reconciliation statement format includes all the entries of the books maintained in the software, which can be reconciled with the bank statement manually or automatically, and shows the unreconciled entries to avoid any discrepancy between the books and bank statement. The BRS format typically includes the bank balance as per the statement, the book balance, and the adjustments made to reconcile the two balances. When there is a gap between the realization of cheques after being deposited or any entries that go without being recorded, like interest, SMS charges, etc., these can be easily identified and reconciled while preparing the BRS statement. BRS in accounting is thus an inevitable tool to manage finances efficiently for any industry.
Experience Auto BRS
Step 1: Fetch the balance as per the bank's e-statement
Step 2: Identify the cheques issued and deposited but not cleared. Sum them separately. These will have an entry in the books; however, the status of clearance has not been updated. Therefore, we have to derive the adjusted balance
Step 3: Derive the adjusted balance by adding the total amount of cheques issued to the bank balance and by subtracting the total amount of cheques deposited from the bank balance
Step 4: Fetch the bank balance as per the book of accounts
Step 5: Sum the amount of entries (debit and credit separately) that were not present in the book of accounts
Step 6: Derive the adjusted balance. If both the adjusted balances match, hooray! Your bank reconciliation statement is ready. The tedious 6-step process can be simplified with accounting software
When one of the most tiring tasks is preparing format of BRS which is brought down to one step, then imagine how Gofrugal can automate other processes in your business. Actually, rather than just imagining, experience the FREE trial of Gofrugal ERP and other apps for a full month.
Avail free trialBank reconciliation statement is prepared after tallying the balance in the company's accounts book with that of the bank balance. Thus, the BRS helps in ensuring the accuracy of the recorded transactions in the company's accounts book aligning with that of the Bank e-statement for a specified time-frame.
The BRS format typically includes the bank balance as per the statement, the book balance, cheques that are deposited or issued but uncleared, and the adjustments made to reconcile the two balances.
Bank reconciliation statement generation isn't a difficult task, yet it's mandatory to keep your books of accounts clear. BRS can be generated easily with accounting software connected to your POS, which reconciles the bank statement with the books of accounts.
A statement prepared after tallying the bank e-statement with the book of accounts is the bank reconciliation statement. Once the BRS is prepared, the book of accounts becomes accurate. Gofrugal integrated accounting software eases the generation of bank reconciliation statements with its special feature, auto BRS. In auto-BRS, all you have to do is upload your bank statement in the accounting software and watch calmly. Gofrugal accounting software will automatically match your transactions in your books of accounts with the bank statement and reconcile the transactions.
