Need and importance of bank reconciliation statement can be expressed as follows:
1. To Ensure Accuracy
Bank reconciliation statement checks cash book and pass book balances. So, it ensures accuracy of the bank balance and cash book balance.
2. To Find Out The Causes Of Disagreement
Bank reconciliation statement finds out the causes of disagreement between cash book balance and pass book balance.
3. Detection Of Errors
It detects errors in cash book and pass book and helps to rectify those errors on time.
4. Up To Date Record
Bank reconciliation statement maintains up to date records regarding payment and collection.
5. Accuracy Of Entries
It ensures the accuracy of pass book and cash book entries.
6. To Maintain Relationship
Bank reconciliation statement helps to maintain good relationship with banks.