• BBA in Finance
    Co-created with Jain University
    4.3 out of 5 by 211 learners
    2x
  • MBA in Investment Banking
    Co-created with Jain University
    4.5 out of 5 by467 learners
    2x industry demand
  • MBA in Fintech
    Co-created with Jain University
    4.4 out of 5 by 349 learners
    2x industry demand
  • Post Graduate Program in Business Management with NMIMS
    Co-created with NMIMS
    4.7 out of 5 by 669 learners
    4x Industry Demand
  • Post Graduate Program in Banking and Credit Underwriting
    4.7 out of 5 by 1376 learners
    12 X industry demand
  • Post Graduate Program In Finance And Accounting
    Co-created with Grant Thornton
    4.9 out of 5 by 238 learners
    14 X industry demand
  • Professional Certification in FinTech
    Co-created with SP Jain School of Global Management
    4.6 out of 5 by 1421 learners
    6X industry demand
  • Credit Risk and Underwriting Prodegree
    Co-created with Moody’s Analytics
    4.6 out of 5 by 1139 learners
    4X industry demand
  • Banking And Wealth Management Bootcamp
    4.6 out of 5 by 1429 learners
    3X industry demand
  • Post Graduate Program In Capital Markets
    4.7 out of 5 by 807 learners
    3X industry demand

Before understanding the trade life cycle of reconciliation, let’s study the term: reconciliation.

Reconciliation

Reconciliation is basically a process in which an accountant compares two separate records and evaluates the accuracy of the agreement. It is a verification method to ensure that the process of trading is correct, secure and consistent in practice.

The process of reconciliation is done in order to protect businesses from fraud and illegal activities in trade. The frequency of reconciliation depends on the body with regular check frequencies of daily, once in a month or in a year.

Now, we are in a position to understand the trade life cycle of reconciliation.

Trade Life Cycle

The life cycle of reconciliation

In most institutions, the process of reconciliation is machine-oriented, thereby automated. But the process still requires humans to double-check the accuracy of the document and look for errors. Reconciliation consists of the following steps, let’s understand them one by one:

1. Checking the cash register with the bank statement

The first step of reconciliation is to compare and check the transaction in the cash register to that of the bank statement. 

2. Finding missing transactions in the bank statement, and matching it with that of the cash register

There are instances when a transaction is not recorded in the bank statement, but it is present in the cash register. The role of an accountant here is to find the missing transaction and fix it in the records.

3. Ensuring transactions are recorded in both bank statement as well as company internal register

As an accountant, it is important to record every transaction of the company in a two-medium form. One in the cash register, and second in the internal cash register. This helps in making the process of accounting and reconciliation easier.

4. Check for bank errors

Sometimes there can be printing or technical errors in bank statements which can lead to major differences in transactions in the bank statements and cash register. So it is important to identify the errors, fix them and produce new adjusted bank statements. The accountant can add, subtract or modify the bank statement to match with the cash register in case of a printing error or technical error. The purpose of the process is to make it transparent and secure for the company.

Banking and Finance

5. Balancing the bank statement and internal cash records

The reason why reconciliation is done is to ensure that the bank statement matches with internal cash records and vice versa. The accountant must identify, correct and modify the errors in any of the maintenance records ( bank statements and internal cash records) in order to depict the good financial health of the company.

There are two ways to check records, one is with the help of double-accounting which we have discussed above. The second is to use analytics to identify major fraudulent activities in the financial system and reporting them.

If you’re too new finance and banking industry and are looking forward to learning Capital Market, bonds, equities, and investment banking, then we highly recommend having a look at our courses in finance at Imarticus Learning. It will help you in understanding the fundamentals of finance and know about how economies work.

For more such articles, feel free to explore more by, 

https://blog.imarticus.org/trade-life-cycle

Ways Trade Execution Can Improve Your Capital Market Business!

 

Everything You Need to Know About Trade Validation and Enrichment in Trade Life Cycle

 

For Online Course Enquiries
About Imarticus
Imarticus Learning is India’s leading professional education institute that offers training in Financial Services, Data Analytics & Technology. We’ve successfully transformed careers of over 35,000+ individuals globally through our Certification, Prodegree, and Post Graduate programs offered in association with leading and renowned global organisations in the Financial Services, Data Analytics & Technology domain.
Related course
  • Placement Assistance
    BBA in Finance
    Co-created with Jain University
    Course duration(Months)
    4
    Upcoming batches
    1
    Organizations enrolled
    20
    4.3 out of 5 by 211 learners
    2x
    Upcoming Batches
    Date Location Schedule
    31st July ONLINE Online
    Date Location Schedule
  • Recent Graduates
    MBA in Investment Banking
    Co-created with Jain University
    Course duration(Months)
    24
    Upcoming batches
    1
    Organizations enrolled
    20
    4.5 out of 5 by467 learners
    2x industry demand
    Upcoming Batches
    Date Location Schedule
    31st July ONLINE Online
    Date Location Schedule
  • Recent Graduates
    MBA in Fintech
    Co-created with Jain University
    Course duration(Months)
    24
    Upcoming batches
    1
    Organizations enrolled
    20
    4.4 out of 5 by 349 learners
    2x industry demand
    Upcoming Batches
    Date Location Schedule
    31st July ONLINE Online
    Date Location Schedule
  • Placement Program
    Post Graduate Program in Business Management with NMIMS
    Co-created with NMIMS
    Course duration(Months)
    24
    Upcoming batches
    1
    Organizations enrolled
    20
    4.7 out of 5 by 669 learners
    4x Industry Demand
    Upcoming Batches
    Date Location Schedule
    ONLINE Online
    Date Location Schedule
  • Post Graduate
    Post Graduate Program in Banking and Credit Underwriting
    Course duration(6)
    Upcoming batches
    1
    Organizations enrolled
    20
    4.7 out of 5 by 1376 learners
    12 X industry demand
    Upcoming Batches
    Date Location Schedule
    Not Available MUMBAI Online
    Date Location Schedule
  • Post Graduate
    Post Graduate Program In Finance And Accounting
    Co-created with Grant Thornton
    Course duration(months)
    4
    Upcoming batches
    1
    Organizations enrolled
    20
    4.9 out of 5 by 238 learners
    14 X industry demand
    Upcoming Batches
    Date Location Schedule
    None DELHI Online
    Date Location Schedule
  • Certification
    Professional Certification in FinTech
    Co-created with SP Jain School of Global Management
    Course duration(Months)
    3
    Upcoming batches
    1
    Organizations enrolled
    20
    4.6 out of 5 by 1421 learners
    6X industry demand
    Upcoming Batches
    Date Location Schedule
    ONLINE Online
    Date Location Schedule
  • PRODEGREE
    Credit Risk and Underwriting Prodegree
    Co-created with Moody’s Analytics
    Course duration(Months)
    3
    Upcoming batches
    2
    Organizations enrolled
    20
    4.6 out of 5 by 1139 learners
    4X industry demand
    Upcoming Batches
    Date Location Schedule
    13th February ONLINE Weekend
    Date Location Schedule
    29th May ONLINE Weekend
  • Certification
    Banking And Wealth Management Bootcamp
    Course duration(Months)
    2-3
    Upcoming batches
    1
    Organizations enrolled
    20
    4.6 out of 5 by 1429 learners
    3X industry demand
    Upcoming Batches
    Date Location Schedule
    30th January LUCKNOW Weekend
    Date Location Schedule
  • Post Graduation
    Post Graduate Program In Capital Markets
    Course duration(months)
    4
    Upcoming batches
    1
    Organizations enrolled
    20
    4.7 out of 5 by 807 learners
    3X industry demand
    Upcoming Batches
    Date Location Schedule
    Not Available ONLINE Online
    Date Location Schedule