Bank Reconciliation Through Meticulous Bookkeeping
Bookkeeping services help businesses track their money and record all of their transactions properly. By itemizing everything into a proper record, you can easily see any errors.
Every business period, you can conduct a bank reconciliation process to make sure your financial records and bank statements match. This process can help you balance your books and avoid losses or financial errors, ensuring correct cash flow for your business. We will learn more about the process of bank reconciliation and how it helps businesses analyze their cash flow after the jump.
The Importance of a Bank Reconciliation
A bank reconciliation at the end of each business period helps you weigh in on your current finances. The bank statement should match your bookkeeping data for each bank reconciliation. Businesses who use QuickBooks bookkeeping services will find it easier to do as most of the more difficult work has been prepared. You will be ready to match up the data against the latest bank statements.
Any discrepancies from the bank or your bookkeeping will show errors and unlisted expenses or income. Once you identify any of these missing items, they should tally at the end and keep you up-to-date with your real bank statement numbers.
From here, you can easily see if you lost money and if there are major discrepancies in certain departments. You also identify any items you forgot to add or other miscellaneous expenses, such as bank service fees for instance. Once everything is analyzed and detailed, you get to see all of your real items listed, and this will help balance your bank reconciliation.
If you employ reliable small business bookkeeping services, you’ll usually have all of your complete data. You can easily consult your bank statement versus your current finance records. Having your data complete and itemized helps you better manage your money and avoid errors or accidental omissions.
The Process of Bank Reconciliation
You can start by looking at your cash deposits first. Itemized deposits on bank statements make them easy to compare. It helps ensure all incoming funds are recorded. However, some items will fall under this category on the bank statement’s side even if they are still unpaid. Their unposted amount will seem like a missing item. These items are usually upcoming payments listed as part of itemized deposits but are future deposits where the amounts are future-dated before they are credited.
Comparing all of your expenses will then help you enumerate all of your outgoing money. If extra payments are missing from your balance, you can identify them here. It is the reason why all receipts are important, as are all payables. It helps us avoid errors, and we get to detail why we spent this amount of money.
When you know the detailed expenses and deposits, along with errors fixed, you can adjust your balance and compare your list to see how reconciled the bank and your data both are.
Final Notes
Properly detailing all of your finances will help you manage your business better. One good way is a proper recording of all financial data or by proper business bookkeeping. You will also need it when performing a bank reconciliation. It helps you analyze your incoming and outgoing money. It will help you see all errors and discrepancies.
Totally Booked understands all these aspects equally. Our extensive financial and bookkeeping services provide many small to medium businesses with a 360-degree view of their cash flow and management. Call us, and we’ll help you real financial balance today.