Bank reconciliation of your book is critical to maintaining the financial integrity of your business
Have you ever heard of or had reasons to pay attention to bank reconciliation? Chances are much less. However, entrepreneurs and the owners of startups & new businesses must learn about it quickly. Account management is now highly complex for a registered organization and sole traders as well. The bank reconciliation can be a crucial part of maintaining and managing the business accounts.
Reconciliation is the process of analyzing your financial statements for consistency and accuracy. This bank statement gives the summary of transactions that are brought in and sent out. It is a path for both bookkeepers and business owners to double-check the accuracy of their company’s financial records. This system ensures money recorded as expenses in your business accounts matches the actual money you have spent.
Comparing a business account against their corresponding bank statements must be done to resolve differences if any. Bank reconciliation of your books is a critical statement because it identifies any errors, inefficiencies & frauds present in cash and bank statements. In case of any variation in accounts, they must be solved as soon as possible. If not resolved quickly there are high chances that it might affect the financial health and integrity of your business.
Few common reconciliation mistakes the business owners commit are
- Incorrect cheque entries with outstanding cheque for too long & wrong cheque
- Ignoring small amounts of cash inflows & outflows in internal records of a company
- Transposition Errors
Bank reconciliation is those that can verify the accuracy of financial data by cleaning up any errors and reviewing your books regularly. Manual bookkeeping being error-prone, bank reconciliation helps in visualizing any irregularities in payment. It also provides an accurate assessment of your business state which can make your company stay top in its performance. Bank reconciliation can help in discovering the tax-deductible expenses.
It is noteworthy that myBooks cloud-based accounting software helps you with connecting and pulling transaction data directly from the bank. Our financial software will be a huge timesaver by replacing the training for a bookkeeper to avoid errors.
For a successful business, practicing financial discipline and recording ledger integrity will be the core components. So, keeping up with the records of a company’s financial transactions is important. We are already systems in place for you to outsource your needs. Accounting can be just got effortless with us.
Reconciling your accounts regularly is critical for maintaining financial integrity in long term. Before it’s too late, your business can catch on errors with this. Also, it prevents your business from landing in inaccurate reporting. Most importantly they help your business in controlling the financial resources.
Bank reconciliation can minimize errors in a financial statement, catch fraud activities, track & manage transactions, and finally, it saves money. Few standard methods to reconcile your accounts are double entry reconciliation and account conversion. Put an end to manual uploads by syncing your tide account to myBooks software. Set up in seconds with automatic feed and zero manual uploads.