Course Outline
Join PRO

How many days after a month ends should the bank reconciliation be done?

Author:
Harold Averkamp, CPA, MBA

Definition Bank Reconciliation

The bank reconciliation (if prepared or reviewed by someone other than the person with access to the checking account) is a form of internal control over a company’s checking account balance. Basically, the bank reconciliation compares the amounts in a company’s accounting records with the amounts in its bank’s records. Any differences are reconciled (explained) so that improper amounts will be exposed and the company’s records and financial statements will report the correct balance for company’s checking account.

At a minimum, the bank reconciliation should be done within a few days after the end of each month. However, with the bank’s electronic records readily accessible, the bank reconciliation should be done more frequently.

Examples for a Timely Bank Reconciliation

Some reasons for preparing a bank reconciliation as soon as possible include the following:

  • If there is an error or omission in the company’s records that affected the balance in the checking account, the company might issue checks when the bank’s records properly indicate there is not sufficient funds in the checking account
  • If there is an error in the company’s cash records, there will be a related error in another account because of the double-entry system of accounting.
  • If a dishonest person is embezzling money through the checking account, the sooner it is discovered the smaller will be the loss. This is the reason for having an independent person prepare the bank reconciliation.

Since electronic deposits and electronic withdrawals (charges) are so common, it is important that the bank reconciliation be prepared and reviewed more frequently than once a month.

Join PRO to Track Progress

Features

Free

PRO

Lifetime Access (One-Time Fee)
Explanations
Quizzes
Q&A
Dictionary
Bookkeeping Video Training
Financial Statements Video Training
Visual Tutorials
Quick Tests
Quick Tests with Coaching
Cheat Sheets
Flashcards
Crossword Puzzles
Word Scrambles with Coaching
Bookkeeping Study Guide
Managerial and Cost Accounting Study Guide
Certificates of Achievement
Bookkeeping Certificate of Excellence
Business Forms
Printable PDF Files
Progress Tracking
Motivational Badges and Points
Motivational Medal Rankings
Motivational Activity Streaks
Public Profile Page of Achievements

About the Author

Harold Averkamp

For the past 52 years, Harold Averkamp (CPA, MBA) has
worked as an accounting supervisor, manager, consultant, university instructor, and innovator in teaching accounting online. He is the sole author of all the materials on AccountingCoach.com.

Learn More About Harold

Read 3,033 Testimonials

PRO for Teams
  • Easily onboard new users and team admins
  • Monitor individual user progress and grades
  • Monitor team progress and compare users
  • View average grades and find problem areas
  • Monitor recent activity and user achievements
PRO for Teams
Take the Tour Join Pro Upgrade to Pro