Reconcile Those Accounts!
Reconciliation is simply comparing the bank records (i.e. your bank statement, credit card statement, etc.) with your company records (the checkbook or ledger) to make sure that everything was entered, and entered correctly.
Staying on top of the reconciliation every month ensures that you are getting accurate information from your bookkeeping records. Are there items from previous months, or years still waiting to be reconciled? Track down the reason for this. Maybe the expense or receipt was entered twice? Maybe the check was never cashed? It’s worth digging into these issues and not ignoring them, hoping they will go away. If it’s been a few months, chances are there is an error that needs attention.
While you’re at it…
A great habit to create during the reconciliation process is to dig into your accounts payables (what you owe your vendors) and accounts receivables (what your clients or members owe you) to make sure these are not getting behind. Your bookkeeping software should allow you to pull Aged Receivables and Aged Payables reports. These reports will show you amounts due in a current, 30-days, 60-days, etc., timeline. If there are bills you forgot to pay, or invoices yet to be paid to you by a customer, you can address them at this time.
Adding this task in with your monthly reconciliation will ensure sure you’re getting the money owed to you and staying on top of paying your vendors so you’re not slapped with late fees, and a huge bill from months of late invoices.
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Equip Bookkeeping is a cloud-based bookkeeping service empowering businesses and nonprofits around their finances. I can help you make smart, confident decisions about your business.
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Equip Bookkeeping Solutions
Owner & Pro-Bookkeeper