Comparing Ledger Account With Bank Statements - Important?

[saoussen5765]

Financials are a big part of any business organization. It is important to carry out regular financial checks to be sure the business is in a good direction. One of those financial checks is to always compare the ledger balance with the bank statement. Why is it necessary to always compare ledger with bank statements?

1) To detect errors: Sometimes, accounting errors can occur. It could be in the form of unreported deposits or withdrawals. Comparing the two balances would reveal the discrepancy and allow for such errors to be traced to know the true financial position of the company.

2) To detect fraud: Sometimes, the accounting staff can try to manipulate the ledger balance after a financial fraud by either taking money or not remitting everything. The bank statement would reveal the inconsistency with the ledger balance and it can be traced before it gets too long and untraceable.

 

[Etini]

If you are not lucky to have people that are extremely sincere in your accounting section, you would end up regretting why you even started business in the first place. That's why you dare not let them have access to the bank statements or any transactional information in the bank. Let them manipulate whatever they want in the ledger while you use the bank statement to fish out their dishonest acts.

Firstly, you need to structure your business in such a way that all payments are done to the bank account so that you would be able to track them.