The need and importance of the bank reconciliation statement are as follows:
- It ensures the accuracy of the balances and records shown by the passbook and cash book.
- It detects the errors which might have occurred in a cash book in connection with bank transactions and help in rectifying those errors.
- Regular preparation of bank reconciliation statements helps in prevention of fraud.
- It detects any undue delay caused during the recording of transactions or collection of cheques.
- This helps in taking appropriate action to prevent any further delay.
- It keeps a check on the accuracy of entries made in both books.
- It helps in updating the cash book as per the passbook.