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A Monthly Bank Account Reconciliation

Appointing a company that is regulated by the Royal Institution of Chartered Surveyors (RICS) ensures that your service charge money

• will be held in a bank account which is a designated client account.
• that it will be reconciled at least every 6 weeks.

Why reconcile a bank account?

In book-keeping a clerk keeps a log (cashbook ledger) into which they record cheques written and receipts banked. When a bank statement is received the process of reconciliation checks the cashbook ledger against the bank statement to confirm the true balance of funds.

Transactions that may need to be adjusted include

1. payments into the account which may have bounced, (i.e. cheques returned by the bank, direct debits claimed where the payee had insufficient funds and therefore the payments are bounced).
2. additional receipts that may need to be entered include receipts such as bank interest.
3. Payments/cheques which are out of time for example a cheque that is over 6 months old will be written back and cancelled with the bank to increase the cashbook ledger to reflect the payment is no longer expected to clear the bank account.

The objective of bank reconciliation is to ensure the manual/computerised cashbook ledger upon which decisions will be made, is accurate.

What is a cashbook?

A cashbook is a ledger which shows the financial transactions being made into and out of an account.

Without a robust bank reconciliation process it is difficult for credit control or arrears action to be taken, as the certainty of payments received and or bounced would not be known.

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