06 Aug The Importance of Account Reconciliation
Let’s talk reconciliation… and no not with your spouse! We are talking about all of your financial accounts including bank, Paypal, and credit card accounts.
Why focus on account reconciliation?
You want to really KNOW (not assume you know) how much money you actually have! When you reconcile your business accounts, you compare your internal financial records against the records provided to you by your HOLDER (bank, Paypal, credit card company).
How often should I do this? - >Monthly reconciliation = not negotiable
Here are a few tips on how to get started:
1. COMPARE THE DEPOSITS – what you think you deposited vs. what actually hit your accounts.
2. Account for all FEES – fees are automatically taken out of your accounts and often we forget about them. However, they will be found on your statements even if you forget to enter them into your QuickBooks or other accounting software.
Why should I reconcile? What is the Purpose?
- Detect errors such as:
- missing payments
- double payments
- calculation errors
- transposed numbers
- outstanding checks
- Confirming and tracking all bank fees and penalties are accounted for.
- Identify fraudulent transactions and theft
- Being in the KNOW – who owes you $$$, by reconciling your accounts you are keeping track of accounts payable and receivables of the business
- Identify holes in your business bucket – cash flow problems, inefficiencies
What good is it to have the WRONG information? It is hard to make the right decision about your business if you have the wrong information!!!
Bank reconciliation done through accounting software is easier- MUCH easier (we can’t imagine doing all of this old school with a pen and paper). The bank transactions are imported automatically allowing you to match and categorize a large number of transactions at the click of a button. This makes the bank reconciliation process efficient and manageable. WINNING! YOU know we love to win hours back in our day.
Part of your Hub membership you can take advantage of these discounts.
Quickbooks: 50% off their subscription cost for 3 months or 50% off subscription for 6 months. https://www.referquickbooks.com/s/Beth77
Harquin Bookkeeping (Bookkeeping services include accounting software)
$5/hr discount = Savings of over $1400/year plus discounted payroll processing and sales tax!
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She Profits Now (QuickBooks Online & Cash Flow Management Training/Courses)
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