What is bank reconciliation? You might have heard the term before, but why is it important?
Completing a bank reconciliation will involve comparing your accounting balance to your bank statements and making sure the balances match. This helps to determine and explain any discrepancies and it means you can rest assured your accounts are in order. It is also important to make accurate and consistent financials if you are a business owner.
How Often Should You Reconcile Your Bank Accounts?
We recommend reconciling your bank amounts at least monthly. The more often you do so, the quicker the process becomes. This is why your bookkeeper bothers you for your bank statements every month. If you are doing your own bookkeeping, then this should be something you add to your monthly to-do list. You will thank yourself later when you won’t need to go back through statements from months ago.
Tips for Finding Discrepancies
Timing
In some cases, your bank may not post a transaction until a day or two later. Try and reconcile an account a few days before or after your statement date to see if things match up then.
Missing or duplicate transactions
This will typically happen on or near your bank statement date. You can start by comparing the transactions near this date and ensure that each transaction is on both your bank statement and on your records.
For some, reconciling your bank accounts gives you a sense of equilibrium and peace, knowing everything is in order. If this is not your strong suit, then it might be time to consider hiring a bookkeeper to keep your accounts reconciled for you. Check out our bookkeeping services at Oasis LLP, and feel free to reach out to us.
