What is bank reconciliation statement (BRS)?

A statement prepared after tallying the bank e-statement with book of accounts is Bank reconciliation statement. Once the BRS is prepared, the book of accounts becomes accurate.

Experience one click BRS
Gofrugal - Capterra Gofrugal - Getapp Gofrugal - Google Gofrugal - Trustpilot

Bank Reconciliation Statement (BRS) Explained

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 final statement of differences prepared after reconciling the bank balance as per books and bank balance as per statement is the Bank Reconciliation Statement (BRS). Companies prepare BRS daily, weekly or fortnightly to keep their books accurate. Then, there are a few who don’t and suffer. If you are one, better reconcile from day 1 with the right solution.

Prepare BRS in a click

Why is Bank Reconciliation Statement important?

Mismatches in the balances rob your time in myriad ways

Cheque issued but not presented

Cheques issued would have not been cleared by the bank. If the status had not been updated in the books, then mismatches emerge. At times, the receiver would have forgotten to deposit the cheque too.

Bank charges or interests

Until you check bank e-statements, you will not have any clue about such happenings. Banks don't notify these via SMS either.

Cheque deposited but not cleared

Cheques received from a party or contra cheque transactions would have not got cleared by the bank. Forgetting to update will cause chaos in your books.

Date mismatches

To err is human. If the cheque cleared data in your books is different from the actual cleared date, especially in case of post-dated cheques, then it's 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 with the bank balance as per your books. Apart from catching these culprits, preparing a bank reconciliation statement will help in identifying stale cheques and tracking every penny that moves in the company.

The above terrorizes when they actually happen. As hackneyed as it sounds, prevention is always better than cure.
Enter, reconciliation!

Bank Reconciliation Statement Format

New entries will be made and wrong entries will be removed from the books to tally the balances. Once every entry in the bank e-statement is matched with the entries in the books, the Bank Reconciliation Statement can be prepared with unreconciled items.

Experience Auto BRS
Gofrugal - BRS format

How to prepare a Bank Reconciliation Statement?

Step 1: Fetch the balance as per bank e-statement

Gofrugal

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 is not updated. Therefore, we have to derive the Adjusted Balance

Gofrugal

Step 3: Derive the Adjusted Balance by adding the total amount of cheques issued to the bank balance and by subtracting total amount of cheques deposited from the bank balance

Gofrugal

Step 4: Fetch the bank balance as per book of accounts

Gofrugal

Step 5: Sum the amount of entries (debit and credit separately) that were not present in the book of accounts

Gofrugal

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

Gofrugal Experience now
Gofrugal Gofrugal Gofrugal Gofrugal Gofrugal Gofrugal

Benefits of preparing BRS with accounting software

By the way, those are the top three reconciliation benefits enjoyed by the customers of Gofrugal

Why should you choose Gofrugal for preparing BRS?

Gofrugal is no new kid on the block. It's a banyan tree expanding the roots to nook and corner of retail, restaurant and distribution businesses since 2004. Gofrugal knows what your business needs.

Auto BRS

The downloaded bank e-statement can be uploaded directly into the accounting software. Entries in the software will get matched with the e-statement entries and the cleared date will be updated automatically.

Know how

One click BRS

Gofrugal went a little further and partnered with ICICI bank to simplify banking operations. A customer of both these entities, can download the e-statement within the software and all it takes is just one click to reconcile and find out the mismatches. The effort in handling the mismatches has become negligible with this integration.

Know how

Experience + Gofrugal = Delight

Surprise Home Linen

More Success Stories

When one of the most tiring tasks, preparing Bank Reconciliation Statement, is brought down to one step, 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 trial