"Bank BR" likely refers to Bank Reconciliation.
A bank reconciliation is the process of matching the balances in an entity's accounting records for a cash account to the corresponding information on a bank statement. The goal is to identify any discrepancies between the two, such as outstanding checks, deposits in transit, bank fees, or errors made by either the bank or the entity. Essentially, a "BR" adjustment is an adjustment made to your bank account for some specific reason, which often requires further investigation.
Here's a breakdown:
- Purpose: The primary goal is to ensure the company's cash balance per its books is accurate and agrees with the bank's records, accounting for any timing differences or errors.
- Why it matters: Regular bank reconciliations help prevent fraud, detect errors, and maintain accurate financial records. Discrepancies can point to problems like unauthorized transactions, bookkeeping errors, or even more serious issues.
- Common Discrepancies:
- Outstanding Checks: Checks issued by the company but not yet cashed by the recipient.
- Deposits in Transit: Deposits made by the company but not yet processed by the bank.
- Bank Charges/Fees: Fees assessed by the bank that the company may not be aware of.
- Errors: Mistakes made by either the bank or the company's accounting staff.
If you see "BR" on your bank statement, it's best to contact your bank for clarification to understand the specific reason for the adjustment.
