What is a deviation
A deviation, in accounting, refers to any anomaly that disrupts the regular pattern or correct representation of financial data. In the context of accounting, deviations often manifest as discrepancies between the account balance and the bank reconciliation balance.
When discrepancies arise in accounting, it is crucial to promptly identify and rectify them to ensure the accuracy of financial records. Failure to do so can lead to misrepresentations that may impact decision-making and financial analysis.
Detecting accounting deviations
Identifying deviations in accounting is essential for maintaining accurate financial records. Discrepancies can occur due to various reasons, such as forgetting to enter transactions, errors in dates or amounts on vouchers, or oversight in recording bank fees, card fees, or interest. Bank reconciliation is a key process for detecting these deviations.
Upon discovering a deviation, the first step is to review the accounting entries for omitted bank fees, card fees, or interest. Subsequently, checking for any missed invoices or bills that correspond to the deviation is crucial. Rectifying the error often involves entering the missing information into the accounting system.
If discrepancies persist, a more in-depth examination is necessary. This involves scrutinizing the bookkeeping for potential errors or omissions, such as posting expenses on the wrong date or with incorrect amounts. This meticulous approach ensures a comprehensive resolution of all accounting deviations.
Deviation in payments
In addition to discrepancies in accounting entries, deviations can also occur in customer payments. This refers to differences between the amount invoiced and the actual payment received. Such variations may result from customers overpaying or underpaying, highlighting the importance of reconciling payment records with invoiced amounts.