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What is a Bank Reconciliation Statement?

It is a useful practice to compare the balance reported by the bank and your internal accounting, in the form of a Bank Reconciliation Statement.

Bank Reconciliation is the useful practice of comparing the records of the bank and a business's internal accounting for a specific accounting period. Many businesses produce Bank Reconciliation Statements (BRS) on a monthly basis.

There may be pending transactions that have not settled yet, such as outstanding checks to vendors, which have shown up on the business’s books but are not represented in the bank account balance. It can be important to identify which transactions have shown up on the bank’s ledger and which ones have not.

It is also possible that mistakes could have been made on either side, and frequent reconciliation will ensure that mistakes are corrected quickly.

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Keywords: balancing books, reconciling accounts, bank account, internal accounting, bank reconciliation statement,