The bank reconciliation are performed by every company in order to reconcile the cash account per the accounting records to the monthly bank statements. They are usually performed on a monthly basis.
There are more often than not items that there are either recorded in the accounts but they are not cleared by the bank (outstanding cheques, items that take a few days to clear etc.) that might not appear in the bank statement.
Similarly, it might the case that some items are properly recorded in the bank statements but they are not recorded in the accounts (bank fees etc.).
A bank reconciliation is a two steps approach. The first step is to take the cash balance per the accounting records and make any necessary adjustments. The second step is to start from the balance per the bank statement and make any necessary adjustments. The revised balances from both steps should agree.
Balance Per Bank Statement $ 1000
Add Cheque not cleared $ 200
Revised Balance $1200
Balance Per Accounts $1300
Less Bank Charges $100
Revised balance $1200