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Thread: Analyzing your Bank Statement On a Daily Basis.

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    Analyzing your Bank Statement On a Daily Basis.

    How many business owners take out the time to review and analyze their bank statements, daily? When we perform accounting tasks we basically record data from the bank statement and perform reconciliation to our cashbook or ledgers.

    Evaluating transactions on a bank statement is a completely different exercise from accounting for the respective items. Businesses lose thousands, due to failure to review the transactions on their bank statements, regularly.

    Payments
    When payments are reconciled, we compare amounts in our books to transactions on the bank statement. The payments however have to be verified as well. A discrepancy will be identified immediately when our numbers differ from the statement amount, which is one objective of the bank reconciliation. But what if the amount agrees with the bank statement, but the check was never verified. A bookkeeper or admin person could have just slipped the check under your nose, and you could have inadvertently signed the check, without really authorizing it. This happens, especially for a range of small checks, (a huge amount will catch the signatories attention immediately) and where various people deal with preparing the check, and the owner only signs.

    Debit orders and bank charges
    How many “deductions” on a bank statement go undetected? Anyone who gains access to your bank account details can draw on your account. The culprits range from legitimate companies to con artists.
    Big companies sometimes commence deducting amounts prior to the agreed date. On many occasions standing, debit or stop orders, are not even signed, but amounts are withdrawn. Experienced business owners will deal with such problems immediately, but others will overlook this sad state of affairs. Stop and reverse payments at your soonest.
    Scams are the other strategy employed by many crooks to extract cash out of your accounts. Fraudulent e-mails by people purporting to be from the bank, requesting a verification of your bank details and passwords, if you use Internet banking. If an account number (and password) is supplied, huge amounts can be withdrawn, and by the time, you identify the problem, it could be too late.

    Bank charges
    If use Internet banking, a bank is not supposed to levy balance or statement enquiry fees. Banks tend to charge for the silliest of items. Loyal bank clients are entitled to a substantial reduction of bank charges. When you see those huge bank charges contact your banker. Also verify whether your bank is charging interest, when a loan or overdraft facility on your account is not in place..

    Deposits
    A common scam worldwide is the “mistaken” deposit of huge amounts into innocent business account. The crooks than call to demand a refund of this amount, and their mistaken deposit will bounce, leaving the business cash strapped, if they refunded. A further problem, is that they also possess you bank details, and can withdraw amounts. Know your customers, and have proper arrangements for payment. Insist on referenced deposits only.

    The only way, you will stay abreast of your cash is to review your bank statements daily. Preferably on an Internet site. Printouts at tellers could be a costly affair.
    Remain vigilant and you could save your business substantial sums.
    Sean Goss We all are scared, but only few are brave.
    www.sgafc.co.za

  2. Thank given for this post:

    Dave A (20-Apr-09), Graeme (20-Apr-09)

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    Site Caretaker Dave A's Avatar
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    Great article
    Quote Originally Posted by sgafc View Post
    Scams are the other strategy employed by many crooks to extract cash out of your accounts. Fraudulent e-mails by people purporting to be from the bank, requesting a verification of your bank details and passwords, if you use Internet banking. If an account number (and password) is supplied, huge amounts can be withdrawn, and by the time, you identify the problem, it could be too late.
    If funds have been fraudulently transferred via internet banking, it is too late no matter how quickly you might spot the problem. Internet transactions are not reversable or stoppable like cheques, debit orders etc.

    BTW - A similar problem exists if you mistakingly pay money into the wrong account via internet transfer. The bank can't/will not reverse the transaction - you are going to need the co-operation of the account holder that received the money in error.

    Treat your log-in data for internet banking as carefully as the key to a safe holding your money, because that is what it is.
    Last edited by Dave A; 11-Aug-09 at 09:02 PM.
    The trouble with opportunity is it normally comes dressed up as work.

  4. Thanks given for this post:

    Graeme (20-Apr-09)

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