How to Reconcile Cash Disbursements
It is important when reconciling cash disbursements for your company that the cash be adequately categorized. Cash is, obviously, coins and currency but it is also considered to be money in bank accounts, certificates of deposits, checks received and written, money orders and even IOUs. When you disburse cash, it must be reconciled -- or classified -- on your balance sheet. A reconciliation basically compares the amount of cash on the bank statement with the amount of cash you show on your ledger or the amount of sales done in a day with the amount of cash on hand.
Record all of your cash disbursements as well as your cash receipts on your ledger. Include the date of each disbursement and receipt so that when you reconcile with your bank statement, the items match up. Write down check numbers or other notable information as needed.
Go over your general ledger and make sure everything is accurate and up to date. Your recent payments should be reflected as negative numbers and subtracted from the amount of cash you are shown to have on hand.
Look at your most recent bank statement. Compare each debit -- cash disbursement -- on the statement with each one noted on your ledger. Note all of your deposits as well.
Write down any disbursements that are missing from your bank statement that show on your general ledger. These are items that have either not yet cleared or did not make the bank statement in time for your reconciliation.
Add up the amount of items missing from your bank statement.
Subtract your general ledger balance from your bank statement balance. If they are not the same number, you must find out where the difference lies. If there are disbursements missing from your bank statement that are on your ledger, it is likely that the difference is that number.
Make sure to add up any bank fees and other fees that you did not originally include and add them to your general ledger.
Add up your cash register receipts or sales for the day.
Add up all of your cash, checks and credit card receipts on hand.
Account for any petty cash disbursements made throughout the day with notations or receipts. If, for example, you purchased items at the grocery store for your restaurant with petty cash, keep that receipt to reconcile where that cash went at the end of the day.
Compare the cash, checks and credit card receipts from the sales amount indicated by the cash register and add in the amount of any disbursements made. These two numbers should be the same. If they aren't, you must find out where the missing amount of money went.
Deposit any cash that is not needed for petty cash or change after the receipts and statements have reconciled.