Bank Reconciliations

If at all possible, an individual other than the person writing checks and making deposits should reconcile the bank account each month.  Many organizations hire an outside accountant or bookkeeper to perform this function to increase the internal controls surrounding cash.

If the organization cannot afford to hire an outside accountant, the executive director (or the treasurer) should receive the unopened bank statement each month.  This individual should review all activity and be confident that all transactions are valid.  The reviewer should initial the bank statement indicating his or her review.  If the reviewer examines the electronic copy of the bank statement, an email indicating the review and approval is sufficient.

Once the review takes place the appropriate individual should reconcile the account.  All bank statements and the related information should then be filed.