By – nsjfinancialservices
24.08.22 04:45 PM
In a nutshell bank reconciliation is to ensure that what you have in your books internally, matches your bank statements. Besides confirming the balances of your accounts, bank reconciliation can also help you identify any potential errors in your records.
For example, if one of your accounts doesn’t have the correct balance or it’s been overdrawn for more than the agreed limit, this might be an indication that something has gone wrong.
A bank reconciling can be done at the beginning or end of the month to ensure that you have correctly recorded all transactions, including those paid by credit card, debit card, and check. To reconcile your bank account, you’ll need to know what items were deposited into your account in addition to what items were deducted from your account.
Monthly reconciliation ensures that at the end of the year you’re not pulling your hair out trying to figure out where or how a transaction was paid for or where the money went to.
Monthly reconciliation ensures that at the end of the year you’re not pulling your hair out trying to figure out where or how a transaction was paid for or where the money went to.
How to make this process easier?
- Record each deposit and withdrawal with your bank statement and keep a record of any checks that were cashed.
- If you use a debit card instead of a check, make sure to use the same account for all purchases.
- Once you have this information together, compare it with your bank statement to make sure that everything is correct.
- If there are any discrepancies between them, contact the financial institution immediately so that they can take corrective action.
Using free apps like Wallet or QuickBooks can help you keep track of every single transaction you make. Both income and expenditure.
Does bank reconciliation sound like a hassle? To some business owners, it can be.
Trust us at NSJ to keep your records up to date AND compliant by taking advantage of our monthly accounting retainer.
