BRS - Bank Reconciliation Statement

BRS is perhaps the most pouplar non- financial statement. It is prevelant in all business enterprises of various kind and sizes. Its importance in tracking payments and collections and as a result maintaining utmost control over bank transactions can't be undermined.


In current business scenario, Bank transactions play a major role in terms of value and volume. So the need to keep a eye on such bank transactions become neccesary. In fact when we prepare a Cash Book, a seperate columm is used to record all the transactions that take place through bank. In effect it shows all the transactions that will be listed in the Bank statement that organisation would receive at month end or at whatever interval. So logically at all point of time the bank balance as per Cash book (Bank Columm) and Bank Statement ( Pass Book) should be equal.

However, in real life there could be situations where balances as per Cash Book and Pass Book does'nt tally. Out of many possible reasons for such mismatch, some are listed below:

• Cheques in clearing
• Direct payment by bank as per standing instructions
• Direct collection by bank as per standing instructions
• Dishonour or instruments not communicated by the bank
• Cheques issued but not presented for clearing
  

Please note that the above list is in no way exhaustive and in real business situation there could be many other reasons for Cash Book and Pass Book not tallying.

BRS lists all such reasons for non-matching of Cash Book and Bank Book