When was the last time you reconciled your books?
While bookkeepers and accountants have many important jobs, spotting errors in your books is probably the most important. Keeping accurate accounts is an essential part of maintaining good financial health, both personally and professionally. One small mistake can create further mistakes, resulting in your finances becoming a complete mess.
There’s an easy way to make sure that your books always accurately reflect your business’ financial health, and that’s by hiring a professional to do monthly reconciliations of your accounts.
What Does Reconciling Mean?
Reconciling your books simply means comparing your financial statements and records to those from external sources, such as your bank or credit card company. Your books should always match up with these external documents, confirming that every transaction you have recorded is complete and valid.
Why Bother Doing Reconciling?
The primary reason you want to reconcile your books regularly is to confirm that your financial information is accurate. By comparing your transactions and balances in Quickbooks Online with documentation from your bank, you can find mistakes, discover fraud or theft, avoid overcharged credit cards, and/or prevent overdrafts on your accounts.
Generally, we recommend reconciling your books once a month, usually when you receive your bank statement. That way, you can compare the information in your accounting program with the entries your bank has recorded. If you don’t have the time to do it yourself, hiring a professional to take care of monthly reconciliation for you can be a fantastic solution. Not only will it give you peace of mind that your accounts are in order, but it will also ensure that all of your financial information is correct for tax time!
How to Reconcile With Online Accounting Software
One of the best ways to reconcile your books is to use a program like Quickbooks Online that automatically keeps track of your savings, bills, invoices, credit card transactions, and much more.
Quickbooks Online offers some outstanding features that quickly allow you to compare the information in your Quickbooks account with that of your bank account, or whatever other accounts you wish to reconcile. Because all of the needed information is right there, it makes it incredibly easy—if a bit time-consuming—to compare it to your bank statements.
To start, navigate to the “Reconcile” page in Quickbooks, click on “Accounting,” and then click “Reconcile.” From there, you can pick which account you wish to reconcile. Once you select the dates that match your bank statement and your beginning and ending balances, you’ll go to a page containing all relevant transactions. Check them off as you compare them to the bank statement to confirm that everything matches. Once the “difference field” is down to zero, your accounts are reconciled!
At The Number Works, we love numbers—obviously—but even we have to admit that reconciling bank statements can be a bit of a tedious process! That’s why so many small business owners trust us to do it for them. We can reconcile all of your accounts on a regular basis to ensure accuracy and prevent any mistakes that could harm your business’ financial health.
If you’d like to hand over your accounting to us or would like some help learning how to use QuickBooks Online to reconcile your books yourself, please feel free to contact The Number Works today. Let’s make sure that your books are ALWAYS in impeccable condition!