Yes, bank balance and cash balance are two different animals, rarely will the they ever be the same. It will be frustrating and a suicidal mission to manage your
cash flow using the bank balance. It’s a prescription for failure. This is because we can only
reconcile our bank balances and not manage it (since we are not the bank manager ) .
Worthy of note is that the differences between the cash book and the bank statement arise for 3 reasons namely:
Errors – usually in the cash book
Omissions – such as bank charges, standing orders and direct debits not posted in the cash book
Timing differences – such as unpresented cheques and unrecorded lodgements.
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