Cash Management and Reconciliation

Cash management and reconciliation is a financial process that involves comparing internal ledger entries to external bank statements. The goal is to ensure that the recorded balance of the business and the recorded balance of the bank statement match up.

Cash reconciliation can help ensure the completeness or accuracy of a transaction. It can also provide assurance for both cash and revenue balances.

Cash reconciliation can involve

• Comparing internal ledger entries to external bank statements

• Confirming the authenticity of the cash balance before the end of a shift or the day's trading

• Verifying the completeness of a sale or transaction across the company's financial systems

• Counting the actual cash in the tin and comparing it to the expected balance as shown in the cashbook

A cash reconciliation specialist might have the following responsibilities:

• Reconciling bank records

• Identifying trends to be addressed

• Investigating potential issues

• Resolving discrepancies

• Providing recommendations to reduce financial risk

Why is cash reconciliation so important?

• Be aware of fraudulent activity. One of the top priorities when it comes to cash reconciliation is to check for signs of fraudulent activity. ...

• To avoid accounting errors. ...

• Confirm accuracy of financial statements. ...

• Accurate tax returns. ...

• Improved cash forecasting.