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    6 Reasons to Reconcile Your Bank Statement Each Month

    [fa icon="clock-o"] May 3, 2021 10:55:00 AM [fa icon="user"] Kathy Dise [fa icon="folder-open'] Bookkeeping

    bookkeeping reconciliation

    When it comes to bookkeeping for small businesses, bank reconciliation is a very important aspect for any company. Reconciling your bank statement involves comparing your business transactions and balances with the bank’s transactions and balances.

    The main goal of reconciling your bank statement is to make sure that the recorded balance of your business and the recorded balance of the bank match up. Here are six reasons why you need to reconcile your bank statement each month:

    1. Validate Data Entry

    Reconciling your bank statement enables you to see if there are any irregularities, such as entering wrong amounts, duplicating entries and other data entry errors.

    2. Confirms Accuracy of Financial Statements

    Confirms that your financial statement matches that of the bank. Maybe the bank made a mistake? It's rare but it happens.

    3. Accurate Tax Reporting

    Reconciling your bank statement is essential for you to generate a correct tax return.

    4. Enables You to Monitor Cash Flow

    5. Identify Irregularities

    Reconciliation spotlights any irregularities between your financial statement and bank statement, such as an outstanding check or electronic transfers.

    6. Controls theft

    It could prevent employees or other people from stealing from your company.

    Clients often ask me when I use Bank Feeds why do I have to reconcile to the bank statement? We often find omissions in a Bank Feed that would not be caught if we didn’t reconcile to the statements at the end of each month. When you use the Bank Feed (which we recommend), reconciliation takes seconds.  When finished with the bank reconciliation, examine the unreconciled transactions for errors and fix them quickly.

    The correct way to reconcile a bank or credit card account can be found in our blog.

    If you have any questions or need help reconciling your accounts, give us a call.
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    Kathy Dise

    Written by Kathy Dise

    Kathy has over 30 years experience helping small businesses succeed. As a commercial lender, commercialization expert and now as a QuickBooks diamond level advisor, Kathy understands the challenges small business owners face. Her experience helps business owners quickly accomplish their financial goals. As the owner of BudgetEase, Kathy works with clients to develop a plan to efficiently process 1,000s of small transactions so owners can make informed decisions. She lives in Shaker Heights, OH with her husband Ralph and enjoys golf, curling and walking in Cleveland’s fabulous Metro Parks.

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