What does a bank reconciliation entail?
A bank reconciliation is a routine check that should be carried out on any bank account to ensure that the cheques written leave and clear the account and that cash paid in is received by the bank. Monies that have not been received (i.e. perhaps lost in the banking system) must be deducted from the cashbook ledger and the payee pursued for duplicate funds. Cheques posted to the cashbook ledger which remain uncleared should be physically stopped and/or a replacement cheque issued.