If you Don't Keep Track of Your Bank Account Movements and Position, Who Will?
When you operate a bank account, the bank maintains a statement of your transactions and balances. That statement is expected to show an exhaustive and accurate picture of your account with the bank. You could as well save yourself the trouble of running a parallel recording-keeping on the same account, you might be tempted to think. Before you make that deadly mistake, please note that a lot could go wrong with the bank's end of the transactions and record, which could cost you dearly if you have taken a nonchalant approach and resigned that responsibility to the bank.
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Banks Are Run By Humans
Banks are largely computerised today, meaning that record-keeping is automated. Inputting of transactions that update your records is however still done by human beings - their staff. Many things can and do occasionally go wrong. A few of these, include.
- The in-putter who posts your transaction can mistakenly key in the wrong figure. If none of the possible detection points picks it, it stays. Such error could cost you a lot of money.
- A transaction you didn't carry out can wrongly hit your account in error. After all, it will only take misstating one digit of the account number for what should go to another account to end up in yours.
- Some cases of fraudulent staff action occur from time to time. Fraudulent withdrawal can be targeted at your account, in one fell swoop or a series of strikes. Alternatively, a lodgement you make may never hit your account, if the receiving teller, in fraudulent action, chooses to suppress and convert it.
- The bank itself can throw wrongful charges into you account. While deliberate entries, say to boost earnings, may be a rare expectation at this time, errors can occur in charging customers. The agreed rate may not be inputted, exposing you account to be default rate, for example.
- A programme error can affect the accuracy of your account. A mere power disruption can cause an entry update to hang or suffer some other distortion, affecting what gets into your account.
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This list is not exhaustive by any means, but just shows samples of what could go wrong with what is recorded in your account and what happens to your account balance. Each of them could boost or diminish your account position, and either way, it is a problem. If you are wrongly credited and you spend the money, apart from the dishonesty of the act, you could be in difficulty if it is found when you are in no easy position to repay. A debit, on the other hand, is outright loss of money.
Have Your Account Under Control
You can have full control over transactions recorded in you account and consequently you account position, simply by exercising the required care.
Firstly, you can't rely on the bank to keep your record. You need a personal record of what you are doing with the bank. All things being equal, this is an exact mirror of what is in the banks record, except for certain items, like transaction charges, initiated by the bank. Keeping a record is particularly useful if you run a business account. All the supportive documents, including cheque stubs, should also be handy.
You must learn the art of bank statement reconciliation, a tool that puts the account in you grip. When you don't have the time or interest to effect bank reconciliation's by yourself, you need somebody to take care of this important final function. When properly carried out, account reconciliation will throw out any discrepancies in your account statement. Bank reconciliation is a process that involves checking off items in the bank-prepared statement, against your record of the transactions. By this process, the items outstanding on both sides can be easily outlined. If there is any item, depicting an error in the bank-statemnt, you then have a basis to confront the bank. Not putting a bank reconciliation system in place could cost you a lot of money, much more money than you would like to lose.
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