Account reconciliation is the process of comparing the company’s financial records internally or externally.
*The company need to reconcile its financial records internally by comparing, for instance, stock records with the physical stock at its warehouse or store, checking its physical cash balance with what the records say, verifying whether expenses incurred or paid in accordance with approved policies and procedures.
*Externally, the company needs to compare its bank accounts with the bank statements, its creditors and debtors’ records with the creditors and debtors periodically.
The truth is that undertaking reconciliation helps the company to verify and confirm that the account balance is accurate and reflects the transactions transpiring over the period. Hence, the resultant account balance is correct and ensures the accuracy in financial records kept by the company.
Through the reconciliation exercise, the company is able to identify errors and irregularities with regard to its financial records and get them corrected or rectified to ensure the accuracy of the company’s books of account.
RECONCILIATION SERVICE WE PROVIDE IN MIRAMORE
1. Bank Reconciliation
We compare the company’s bank accounts or cash book with the bank statements received from the banks. All deposits and withdrawals in the cash book are compared with the bank statements to ensure that the correct entries were made. All disparities between the two statements or accounts are then investigated by us the findings of the same are brought to the company’s management attention for the necessary actions.
2. Cash Reconciliation
We compare the physical cash count with the cash balance with the company at a given point in time. Some cash payments might be made by the officer-in-charge of the cash with the approval of management. The company, in turn, will be losing a lot of funds if these frauds are not corrected. The liquidity of the company gets affects in the long run.
3. Stock Reconciliation
The physical stock quantities might be different from what the company’s records indicated. The disparity is usually as a result of poor internal control over the stock items. In many cases, the stock items are stolen or sold to customers with passing through the company’s records. Not reconciling the stock records and putting in place measures to ensure the accuracy between the stock records and the physical stock quantities will result in the collapse of the company in the long run. We undertake physical stock counts and reconciliation to help the company have control over its stock items.
4. Creditors Reconciliation
The company’s records or statements might be totally different from what the creditors’ statements state. These disparities go a long way to affect the business relationship between the company and its creditors’ if not resolved as soon as detected. We help companies to reconcile the creditors’ statements with theirs to ensure a healthy relationship between the company and the creditors.
5. Debtors Reconciliation
Likewise, the company’s records might be totally different from what the debtors’ statements indicate. These disparities go a long way to affect the business relationship between the company and its debtors if not resolved as soon as identified. We help companies to reconcile the debtors’ statements with theirs to ensure a healthy relationship between the company and its debtors
6. Payroll accuracy and bookkeeping accuracy:
Your payroll represents an accounting system connecting your business, your employees and the various agencies that collect taxes on the sums you pay to your staff. It is important that payroll be precise, because this precision makes you fully accountable to your partners in the payroll process and enables you to fully satisfy your obligations to them. In addition, an accurate payroll can save you the stress and hassle of having to backtrack and straighten out your accounting system when tax time arrives. Accurate and precise payroll records document an important element of your company’s finances and enable you to achieve consistency among various bookkeeping processes such as reconciling tax liabilities with cash flow projections, balance sheets and profit-and-loss statements. When your business presents its books to an outside party such as a loan officer or a potential investor, it is important for all of your records, including payroll, to be as accurate and precise as possible. Failure to resolve inconsistencies creates an impression of sloppy bookkeeping practices and lack of accountability.
At Miramore Consulting we render this service to companies.