Bank Reconciliation - Standing Order

[lws_sanlee]

Example:

Bank Reconciliation Statement

Balance as per cash book
Add:
cheque issued but not debited by bank
standing order

Less:
cheque deposited in bank but not credited
bank charges

Balance as per bank statement



I dont understand why the standing order should to add up. Standing order is a payment making by bank immediately but it is not recorded in the cash book until after the bank statement is received.

I very confuse about it. It should be minus from the cash book.

TQ!

[Tammi]

hi,
I quite agree with you,
I can offer an easier way of bank reconciliation:
there are unrecorded items which you should record in the cash book and timing differences not yet recorded in the bank statement.

Unrecorded items:
Balance as per cash book
Add:
Interest
Direct credits
Less:
Bank charges
Direct debits/standing orders
Dishonoured cheques

Timing differences:
Balance as per bank statement
Add:
cheque deposited in bank but not credited/Outstanding lodgements
Less:
cheque issued but not debited by bank/Outstanding cheques

The main thing is to remember whether you have positive or negative balance, so that then you can calculate correctly.

[Grace]

Apologies! This is our mistake. Standing orders should be deducted when starting point for bank reconciliation is cash book balance.