A Bank Reconciliation Statement is a summary of banking and business activity that reconciles an entity’s bank account with its financial records. The statement outlines the deposits, withdrawals, and other activities affecting a bank account for a specific period. A bank reconciliation statement is a useful financial internal control tool used to thwart fraud.The purpose of a bank reconciliation statement is to ensure that the balances shown in an entity’s accounting records match the balances shown on the company’s banks statements. This process helps identify any discrepancies so they can be investigated and resolved. Bank reconciliations are also used to ensure that all transactions have been properly recorded in the accounting system, as well as to track changes in account balances over time.Bank reconciliations should be performed on a regular basis, typically monthly or quarterly depending on the size and complexity of an organization’s finances. The results of each reconciliation should be documented so that management can make informed decisions about how best to manage their company's money flow.
