What is bank reconciliation?
Business owners checking their online bank account for the balance take the number to be the actual value to spend. Bank reconciliation helps identify transactions in the accounting system. Businesses pull the bank feeds directly, and reconciling your company records, give clarity to your bank position.
6 Best Kept Secrets of your Business’s Bank Reconciliation
Bank reconciliation is a crucial task for every business to perform. Here are a few secrets about bank reconciliation:
1. The more you do, the better
Reconciling accounts frequently with the bank statements of your credit cards or bank transactions is the best. You can take online account access and consider monthly reconciliation of accounts. It helps in financial management. New customers may consider it cost-effective banking with seamless and easy reconciliations.
Account reconciliation is a way of accrual accounting, and bank reconciliation reveals the cash flow of your business. Frequent reconciliations allow tracking throughout the month of key performance indicators. You can identify bank errors and accounting mistakes easily.
2. Bank Reconciliation is worthless if there is no separation of duties
Without separating the duties, it is difficult. Your business becomes vulnerable to overlooked mistakes and inconsistencies that are prone to fraud. Individuals are responsible to enter information while handling receivables and payables.
Separating duties is vital so that another person and the second pair of eyes can find the changes. It will be easy for fraud detection. Separating AR/AP duties and reconciliation of the financial operations staff prevents occupational fraud opportunities from going undetected.
3. Reconcile with QuickBooks
Bank reconciliation with the ledger and smudged lines are gone. QuickBooks reconcile the credit card and bank account electronically. Traditionally, the bank statement came in print or mail, and each transaction record as monthly, quarterly, or annually. It was as per the account type.
Online banking now eliminates the need to wait for the mail or bank statements. Reconciling with QuickBooks is possible with ease. The reconcile screen shows each transaction and the record comparison to check off and clear correctly.
4. Consistency and Accuracy are the keys
Optimizing QuickBooks and establishing for account reconciliation a strong foundation ensures streamlined accounting management. Accuracy in accounts ensures no default tax returns. Automating everything ensures low costs, time savings, and accuracy.
5. Simple balancing of accounts
People can deliver fast the balancing of accounts. The process becomes simple with bank reconciliation. It is because fraud detection and the red flags are out with reconciliation.
Discover deposits or missing checks are possible if it fails to reach the bank. You can search easily for duplicate transactions and notice bills that are in or out per month. The reconciliation features no issues, and at the same time, your registers are in balance, quick to review and give financial management.
6. Benefit and grow
Your business benefits as you do not miss your tax returns. Everything is possible with bank reconciliation. It is an automated technology and a process well established for a long. The services of reconciliation help detect fraudulent transactions, do tax preparations actively, and track cash flow anytime.
Detecting errors of the user and bank, verifying payees and deposits, and checking with actionable data all in one task is possible. All the benefits add to business growth and are the best-kept secret. The risk of task neglect has no room, and there is no excuse to go without reconciliation, regardless of the business.
