Bank Reconciliation Statement

Amongst various ledger accounts maintained by an organization as part of its books of…

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Amongst various ledger accounts maintained by an organization as part of its books of accounts, one of them is bank ledger, also called bank book. Like any other ledger account, it captures entries that affect the bank balance, viz. salaries paid, receipts from debtors etc. 

While the bank ledger records these transactions to show a certain bank balance at the end of the period, the actual bank balance as per bank statement (also called passbook) for the same period may be different. This could happen on account of various reasons, for example, chews issued to vendors for payment but not encashed by them, i.e. not presented for payment. Or cheques received from debtor and captured in accounts but the credit is not reflected in the bank statement as yet. 

These days, with most transactions being NEFT / IMPS and therefore in almost real time, chances of such differences has greatly reduced. However, there could still be some differences, like bank charges levied by the bank which the organization gets to know only once the books are compared with the bank statement.

The process of comparing the bank balance as per books and bank statement and identifying differences is called bank reconciliation, and is usually documented by way of a BRS – Bank Reconciliation Statement.

Typical adjustments seen in a BRS are:


Impact on bank statement

Adjustment to bank book to arrive at balance as per bank statement

1.Cheques issued but not presented for payment by vendorWill inflate balance as per statementAdd to ledger balance
2.Cheques deposited but not clearedWill reduce balance as per statementReduce from ledger balance
3.Bank charges debited by bankWill reduce balance as per statementReduce from ledger balance
4.Interest income credited by bankWill inflate balance as per statementAdd to ledger balance
5.Cheques deposited but returned dishonoredWill reduce balance as per statementReduce from ledger balance
6.Standing instructions for certain payments not captured in booksWill reduce balance as per statementReduce from ledger balance

Depending upon the volume of transactions, businesses may prepare reconciliation more regularly, say weekly or even daily, rather than at the end of accounting year.

For those maintaining accounts in Tally, the process of bank reconciliation gets quite simplified due to the features of Tally. There are options to prepare BRS manually, and also to activate auto preparation. With just a couple of clicks, a user can choose the bank account for which reconciliation needs to be prepared, select the bank statement, and Tally would prepare a BRS automatically by comparing entries in bank book with line items in the bank statement.

To learn about various features of Tally including how to prepare bank reconciliation statement, you could enroll with Super 20 Training Institute which offers some of the best Tally courses in Ahmedabad.

Tally; Basic of Accounting

I am an accountant, and can perform all my tasks perfectly in given time.…

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Best accounting and tally classes in Ahmedabad

I am an accountant, and can perform all my tasks perfectly in given time. My superiors have faith in me and my subordinates are my friends.

Sounds like an ideal professional (work) life! Right?

Your attitude, your behaviour, your dedication and your decisions predict your life. The more you think you want to achieve your goal, the more you come close to it.

As a future accountant the required field of knowledge is all what you have learned or learning in your graduation. But it does not comprise everything to meet the needs of an accountant. For completing any task on thing you must know how to handle your work smartly. In today’s scenario software’s are helping us to go smart. And for accounting purpose tally is the first suggestion in the field of accounting.

Tally Solutions Pvt. Ltd. is an Indian multinational company that provides enterprise resource planning software called Tally.ERP 9 with single and multi-user licences. Tally is not just accounting software, after the introduction of ERP. The capability and functioning of Tally is much more widened and extended to a great extent. Its software is used by more than 1 Million customers.

Learning tally is mandatory for every commerce graduate. Because, it avails every facility from basic to expert level comprising

  1. Recording of  financial transactions of all forms of business,
  2. Helps an accountant to create and maintain records and documents,
  3. Helps in finalization of accounts

And includes all the qualities of any electronic device like time efficient, accurate, reasonable, etc.. It also helps to maintain the employees information like his attendance, salary, bonus, leaves and many more things.

The situation changes after the introduction of Goods and Services Tax (GST). Earlier the Indian constitution had very complex procedure and various type of taxes but GST served with an idea of 1 nation 1 tax.  GST is a single tax on the supply of goods and services.

 If reports are to be believed, there has been a nearly 34% of GST mismatch or underpayment of GST, amounting to an overwhelming deficit of INR 34,400 Crores. The problem was wisely solved by the updated version of Tally.ERP.9 which enabled its users to calculate GST and also facilitated to maintain their records systematically. Now everyone wants to know the concept of GST which is easily done through tally. So again the required field for any accountant is tally.

So, if you aim to become a wise accountant, you must focus on understanding tally first. And if you are looking for guidance then you must scroll the tally courses of Super20 Training Institute. Here, you will be guided by the CA faculty and tally is taught along with not only GST but taxation too.

You can also visit to the website of Super20 and can get an idea of what you will be taught and how. Make sure you take decisions before its too late.

Because the late you start, the late you achieve your goal.