This is because the bank has a different method for the calculation of interest. Also, the interest on loan figures may not match. This income, at times, does not tally with the income recorded in the books. Interest Entries: The bank provides interest income on the Fixed deposits. Consequently, these cheques will lie unreconciled in the BRS.Ģ. But since it's a post-dated cheque, it will not appear in the bank statement unless its date arrives. The entries about the post-dated cheques get passed in the books of accounts.
In business lines, issuing post-dated cheques is a common practice. Once the cheques get cleared, the amount moves from the BRS to the books of transactions of the account. To keep a check on the unreconciled amount, the cashier prepares a Bank Reconciliation Statement. The entries in the books of transactions cannot stop since the accountant continues to pass the entries. The maximum time which a bank takes to clear a cheque is 3 days. Similarly, the cheque deposited in the bank might not have gotten cleared. Cheques : The company may have issued the cheque, but the vendor may not have presented it for payment. What differences can occur in Bank Reconciliation?ġ.
It is always advisable to use software tools such as BRS in Tally ERP 9 to prepare BRS.
The manual process of making a BRS will take days, given the volume of transactions. However, the principle of making the BRS remains the same. As a result, we are seeing a shift from the manual process of making the BRS to the electronic method. There is various software available in the market that provides Bank reconciliation features. There are many ways to reconcile the BRS. Even if a situation occurs when the cashier tries to inflate the bank balances, the Auditor can get a true picture by viewing the BRS. With BRS, transactions can be easily tracked, and it helps the auditor find how old the unreconciled balance is so that they can have an overall view of the business. The bank may have passed the entries that do not pertain to the company. What is the Importance of Bank Reconciliation in TallyīRS in Tally is ideal for the higher management to reach out to the bank if the difference between cash book and passbook is not justified. That is when the role of the Bank Reconciliation Statement (BRS) came into the limelight. Many times, the balances as per bank statements and cash books do not match. As the name suggests, Bank Reconciliation Statement (BRS) is a statement that reconciles the balances between the bank statement and the book of accounts.