Simple Accounting

American banks really should try using simple accounting to remedy their issues. It seems they’re too busy with whatever you want to call what it is they do, rather than accounting for the money and assets within their institution.

Case In Point:

21st Century bank statements don’t cover proper accounting, or what should be banking procedure. At least, procedure as defined for anyone who has completed basic high school accounting. As the high school student can tell you for your accounts to balance you need the following:

Receivables, this is a list of all deposits.

Payables, this is a list of all debits. Debits may be broken down into several categories, checks, transfers, fees, charges. The proper form is a list for each category.

Summary, this is a short list of the account showing previous balance, in, out and current balance.

You’d think with all the technology at their disposal, they’d include all pertinent information on the statement.

Today’s mail brought a bank statement which included a summary and a running balance.

Transaction History or Running Balance, this is a list of the in and out from the account. This is nice to include a running balance sheet but is not a statement of account.

This running balance is good to know if you tend to overextend yourself, but kiting checks puts you in danger of bouncing checks, getting charged mega-dollars in fees, not to mention bouncing checks is illegal.

The question that comes to mind: If this is the state of banking at this small level, imagine what a mess it is on a large scale…

What’s that you say? You’ve been reading the financial news headlines?… Well, then you already know…