The Importance of Bank Reconciliations
When I was young lad, I remember watching my mother go through her check register and mark off which checks cleared the bank each month. She would go over the bank statement and check all the deposits to make sure they were correct. Fast forward to present day, I am not sure of the last time I wrote a paper check, but I still look over the bank transactions.
Reviewing your bank and credit card transactions is important, both personally and for business. It can help you catch bank errors, though this is pretty rare, notice suspicious charges earlier, and in general give you a feeling for your cash flow. If you notice that the cash-ins are not keeping up with the cash-outs, you know something needs changing. It all starts with looking over and reconciling your accounts.
For businesses, reconciliations are generally one of the first things asked about and checked. The bank being reconciled means that all the transactions that hit the bank are on the books, even if they are not necessary in the right category. It is less likely that income and expenses are missed when preparing a tax return. Most banks make this a very easy process nowadays with online banking. Many of them let you see several months back, have scans of checks, and gives you the ability to download transactions to QuickBooks. Making a habit of doing this monthly can save a lot of time and money.
If you need assistance with reconciling your accounts, especially with QuickBooks, give us a call! Now is a good time to make sure you are caught up and ready to go for 2019 taxes.