6 Easy Yet Effective Tips to Help You with Reconciliation

Running a business is by no means an easy task. You need to take care of your customers while balancing other tasks such as arranging supply orders, training employees, and managing records. The last one is crucial because tracking your records through bookkeeping is necessary so that you'll know where your money is being spent. With this in mind, reconciling your data is needed.

In bookkeeping, reconciliation refers to cross-referencing data to ensure that all figures are correct. It's a tedious yet essential process, so it must be completed to ensure that everything is on record. Without it, you won't know if your books are accurate. To help you with reconciliation, here are some practical tips to try:

#1 - Keep All Your Documents Updated

First, it's essential to know that you won't be able to close your books without recording all transactions that have happened at your business. The moment you receive payments in your bank account, make sure you enter those funds in your bookkeeping software.

You can also reduce the time you'll need for reconciliation by arranging for a daily bank feed. This will allow for accurate and timely recording of all transactions, making the process easier.

#2 - Stick to a Regular Schedule

Schedule your reconciliation activities so that you won't have problems closing your books. Some businesses do this monthly, while others choose a quarterly basis. You should decide based on your preferences, and the time you can spare.

#3 - Make Sure You Understand the Transactions

To make the process simpler and faster, you need to know what transactions you're working with. For example, if you need to reconcile accounts payable, ensure that you know the accounts it's connected to, namely cash and bank accounts. This way, you'll be able to record transactions easily.

#4 - Don’t Forget to Include Your Cash Register

Your cash register is your business' money-making engine. You need to make sure that all transactions on it are recorded automatically or manually. This way, you won't be guessing when entering transactions.

#5 - Keep an Eye Out for Common Discrepancies

Discrepancies are common in bookkeeping, so don't be alarmed if you find some. The trick is to know how to deal with them. For example, add it to the financial report if a transaction doesn't appear in both accounts but has a record.

Here are some of the most common discrepancies you might find:

Duplicate Entries

You're bound to find duplicate entries if you don't have a strict system for recording and entering your transactions. Check if the same entries appear in both accounts, and make sure that you delete the duplicate.

Misplaced Decimal Points

As you record your transactions, make sure that you place the decimal points in the right places to avoid confusion. This is especially important if you're using a computerized system.

Digits Entered in the Wrong Order

When entering a transaction, make sure that the digits are entered correctly. For instance, if you're entering an amount of $5,000, you need to ensure that all numbers are there. Otherwise, you'll be confused when you start the reconciliation process.

Missing Transactions

Missing transactions are probably one of the most common discrepancies and easiest to deal with. Check your records and find out if the disappeared transactions were recorded. If they weren't, add them to your books.

#6 - Outsource and Automate the Process

If you have a lot of transactions to enter, consider hiring a bookkeeper to do the task for you. This way, you'll be able to focus on other crucial tasks.

With the help of bookkeeping software, you can also drastically reduce the time needed for reconciling your accounts. The software will automatically record your transactions, helping you keep track of your financial performance.

Conclusion

With these tips in mind, you'll be able to reduce the time and effort needed for reconciliation. This is especially important if you have a lot of transactions to enter and manage. Since you can't close your books if you don't have all the information, you must finish this process to move on with other tasks.

Totally Booked provides top-quality bookkeeping services in New York. We offer comprehensive financial solutions to ensure you never miss anything, such as payroll, budgeting, taxes, and many more, all for affordable prices. Reach out today and allow us to assist you!