Bank Accounting

The banks with which your company (company code) maintains a bank account are
referred to as house banks in SAP.
You define these banks in the system under a house bank key (bank ID). You store
the accounts that you maintain at these banks under an account ID. For each bank
account, you create a G/L account in the SAP system.
Bank master data is stored centrally in the SAP system. This includes address data
and other control data, such as the SWIFT code. You require bank master data for
your house banks and for your customer or vendor's banks. By specifying the country
and a country-specific key, such as the bank number or the SWIFT code, you
establish the connection between your house banks and the bank master data.

Reconcilations

We Have 4 Types Of Reconcilations

* Bank Reconcilation Account***
* Account Payable Recocnilation Account
* Account Receivables Reconcilation Account
* Stock Reconcilation Account[Asset / Inventory]

*** Bank Reconcilation Statement

When An Individual / Firm Deposits Any Money Into Bank / With Draw Money By
Issuing A Cheque From A Bank, It Record The Transaction In The Debit Side Of The
Bank Colums Of The Cash Book For Such Deposis And Credit Side Of The Bank Column Of
The Cash Book For Such Withdrawals.

On The Other hand, Bank Also Records Such As A Transactions In Its Books, Credit
Accounts For Deposits, And Debit Accounts For Withdrawals.

The Bank Issues A Book To The Account Holder After Recording Transactions.

The Book Which Prepared By The Bank By The Bank For Account Holders Is Known As
Pass Book.

In Case Of Current Accounty The Bak issues Statement And Not A Pass Book, The
Statement Is Known As A Bank Statement.

For Example:

SBI Bank Account

SREE KRISHNA INFOTECH
Account Number[963963963398]
Saving Account / Current[Sree
Krishna Infotech]

Note:
A Statement Which Is Prepared To Reconcile The casues Of Differece between
Bank Balance As Per Cash Book And Bank Balance As Per Pass Book / Bank Statement Is
Known As A Bank Reconcilation Statement.

*** Features Of Bank Reconcilation Statment

* Its Is A Statement[Report]
* It Is Not A Part Of The Process Of Accounts
 * It Is Prepared To Reconcile The Casues Of Diffrence Between The Bank
Balance As Per Cash Book And The Bank Balance Per Pass Book.
* It Can Be Prapared At Any time During The Financial Year As And When It Is
Required Management
* Since It Is Prepared On Particular Date, It Is Written As A Bank
Reconcilation Statement.

*** Reasons For Diffrence Between Cash Book And PassBook

The Diffrences Are Basically 2 Types

* Items Appear In Cash Book But Not Appearing In Passbook
* Otems Appear In Passbook But Not Appearing In Cash Book

Example 01:
*** Items Not Appearing In Bank Passbook
01* Cheque Issued By Business Entity Not debited By The Bank
02* Cheque Deposited But Not Credited By The Bank
03* Techinical Error In Bank Server.
04* Standing Instuctors

Example: 02:
*** Items Not Appearing In The Cash Book
01* Bank Interest , Bank Charges
02* Direct Deposit In Bank Account
03* Biils For Collection
04* Technical Error In Bank Server

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WhyNeed Of Bank Reconcilation Statement

*** It Helps To Understand Teh Actual Bank Balance.

*** It help To Identify The Mistake In The Cash Book / Passbook.
*** It Helps To Detect And Prevent Fraude And Error In recording The Bank
Transactions.
*** It Helps To Incorporate Certain Expenditure/Income Debited/Credited By Bank In
Books Of Accounts.

What Methods Will Use To Create Bank Statement

* Rules Of Addition And Subtraction

* Debit And Credit Method

*** Very Important Process

Steps In Preparing Bank Reconcilation Statement

*** One Has ToHave A Systematic Apporach Towards Preparation Of The Recocnialtion.
To Avoide A Lengthy Recocnilation, One Must Ensure That The Entries In Cash Book
Are Absolutely Online, One Also Must Obtain The Bank Statement At Regular
Interveals. Once This Checking Is Done, Bank Statement Could Be Done By Few Steps.