Aftermath of Bank Reconciliation

Upon completion of a bank reconciliation, it is natural to wonder about the next steps to take.

This post aims to provide guidance on what to do, specifically for those who are unfamiliar with the process, in a clear and concise manner.
If you are new to bank reconciliations, don’t worry – this post will walk you through what actions to take and provide a clear roadmap for getting back on track.

What comes after bank reconciliation?

Here are the next steps after bank reconciliation:

1. Read your company’s manual

Review your company’s manual to see if it outlines the steps to take after bank reconciliation.

If no manual is available, or if you want to take initiative, proceed with the following steps.

Be sure to thoroughly understand each reconciling item in the bank reconciliation, as these details will be crucial for the next step.

2. Prepare Suggested Adjusting entries for resolved reconciling items

After reconciling your bank statement, you’ll need to prepare suggested adjusting entries for reconciling items that have supporting documents.

This means resolving items like interest income, bank charges, and unrecorded check issuances, which are valid and properly authorized and documented.

Essentially, you’re recording these transactions because they’ve been verified and are ready to be processed.

3. Ask Assistance for unknown reconciling items

After bank reconciliation, unidentified reconciling items often emerge, representing unrecorded transactions lacking complete documentation.

Examples include an unknown credit fund transfer, an unknown check issued reflected in bank statement debits, and other unexplained transactions.

Since these transactions cannot be recorded in the company books without supporting documentation, it’s essential to investigate their origin.

You can do this by inquiring with other sections or departments within your organization.

It’s best to communicate in writing, typically through a letter, to ensure prompt resolution.

Verbal communication can sometimes lead to delays or prolonged resolution times, making written communication the preferred method.

4. Submit the adjusting entries to the accountant

After completing bank reconciliation, you should prepare suggested adjusting entries to resolve reconciling items.

Before submitting these entries, inquire about any undocumented reconciling items that may have been overlooked.

Once you have gathered all the necessary information, consolidate the suggested adjusting entries into a single document.

This will ensure that the accountant can review and approve the entries efficiently.

When submitting the adjusting entries, be sure to attach all supporting documents, such as invoices, receipts, or other relevant evidence, to facilitate the review and approval process.