Accounting / July 18, 2018 / Willow Mccoy
When one thinks of how successful or unsuccessful a business is doing, it’s natural to lean towards the strategic elements of an organization that ensure profits come in: investments, funding decisions and risk management. While these elements are important, the success of a business, especially how it runs its day to day operations, is highly dependent on the effective management of operational cash (or commonly called cash flow or cash on hand). This comes in the form of accounts payable (AP) and accounts receivable (AR).
Bank reconciliation statements ensure payments have been processed and cash collections have been deposited into the bank. The reconciliation statement helps identify differences between the bank balance and book balance, in order to process necessary adjustments or corrections. An accountant typically processes reconciliation statements once a month.
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