General Journal

Procedures Manual: Bank Reconciliations and Transfers

posted on Wed, Jun 20 2012 7:40 am by Carol

computer money transfer image

In honor of the 45th anniversary of the installation of the world’s first ATM (location: Enfield Town, England), Fun with Financials raises its glass to celebrate. And then asks you to complete the next chapter of the Procedures Manual about reconciling your bank statement and transferring money.


Reconcile a Bank Statement

When you reconcile your organization’s monthly bank statement, you have an opportunity to compare your records with the bank’s record. You can identify errors, discrepancies or possible fraudulent activity. You also can keep track of un-cleared deposits and un-cashed checks that you need to keep on your watch list.

If you like tasks that only involve right or wrong answers, then bank reconciliation is for you. Either it reconciles. Or it doesn’t. If it doesn’t you get to play a little detective work to find out why.

Let’s get started!

  1. Who reconciles your monthly bank statements?
  2. How do you enter any interest earned or service charges?
  3. How do you compare the bank’s record of deposits against your own?
  4. How do you compare the bank’s record of checks against your own?
  5. How do you compare the bank’s record of electronic payments, debit card transactions, or ATM withdrawals against your own?
  6. What do you do when the bank’s record shows transactions that don’t appear in your register?
  7. What do you do if the bank’s record is false or inaccurate?
  8. How old do you allow un-cashed checks to be before writing them off?
  9. How do you record the transaction to write off an outdated un-cashed check?
  10. What do you do if the bank statement and your register don’t reconcile?

 

Transferring money

Many organizations keep the bulk of their money in a savings account in order to earn interest. But when it comes time to write checks to cover payroll and expenses, the organization needs to transfer the money from savings to checking.

These questions below will help map out the best practices for transferring money safely and soundly.

  1. How often do you transfer money between accounts?
  2. Who is authorized to transfer money between accounts?
  3. Who determines how much money should be transferred?
  4. Where do you record the transaction?
  5. Who records the transaction?
  6. Once you’ve transferred the money, who guarantees/determines that the transfer was done successfully?

 

If you’ve been answering these questions each month, you’re almost halfway through creating your procedures manual. For those that need to catch up, click here to start your journey toward a written financial procedures manual.

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