A bank reconciliation is a process and report that compares your agency’s general ledger (GL) cash balance to your agency’s bank balance. The reconciliation process helps to maintain an accurate cash balance, track cash flow, detect fraud, and identify bank errors. It also helps providers submit accurate Quarterly Financial Reports and Annual Closeout Reports.
Tips for Reconciliation:
- Bank reconciliations should be completed within the first week of each month as a part of a monthly close cycle, after processing payroll and reconciling accounts payable and receivable.
- Consider using accounting software with banking modules to help you complete the reconciliation within the system.
- Consider establishing a default tolerance, an acceptable amount of difference between the General Ledger cash balance and the bank balance, between $1-$5.
- Have a preparer and reviewer signoff on the final document.