There are several things that entrepreneurs should keep in mind about they are Edmonton bookkeeping. Not only is it important to know how to do, but it is also important to know how to do it popularly and well. Business owners should be in ensuring that they are scheduling all of their bookkeeping services into their schedule because as most entrepreneurs know, things that are scheduled actually happen. Nothing is more important to an entrepreneur in ensuring that their bank reconciliation is done properly and well because bank reconciliations help entrepreneurs understand how much money they have in their business. Entrepreneurs should into the habit of doing a bank reconciliation before they decide to spend any money in their business. Since 50% of all entrepreneurs fail within the first five years of business, and 29% of those failed entrepreneurs say that the reason why they fail is that they ran out of money. If entrepreneurs can help themselves avoid running out of money in their business, they can significantly impact their chances of succeeding.
In order to do great bank reconciliation, a business owner needs to have three things: bank statements, a record of all checks written in the previous time period, and the previous bank reconciliation. Once an entrepreneur has these three things, they will be able to do a bank reconciliation any time they want to ensure they have money in their business for the next purchase, pay period, or taking dividends out of their corporation.
Many entrepreneurs believe that they need special software to do their bank reconciliation, and well Edmonton bookkeeping says technology can make it much easier, entrepreneurs do not need anything more special than an Excel spreadsheet. However, using bookkeeping software called QuickBooks online, business owners can automate several of their bookkeeping processes which can make doing their bank reconciliation much easier. There is a feature in QuickBooks online called bank feed which automates the process of entering in all transactions from a bank account into the software. When an entrepreneur gets this setup, all bank transactions are manually entered into QuickBooks online, eliminating the need to enter at all by hand.
The reason why an entrepreneur might want to use the bank feed feature in QuickBooks online is that it is much more accurate and much more speedy. Edmonton bookkeeping says that business owners should still get into the habit of reviewing those transactions on a regular basis to verify the accuracy of the software. Still, with the review of the transactions, it is still much faster as well as easier and more accurate.
Doing a great bank reconciliation does not need to be difficult, but doing it well is very important, if entrepreneurs can get into the habit of doing a great bank reconciliation, they can be certain that the reports they end up with are going to be a great tool to help them make business decisions that can help them avoid running out of money in their business.
The reason why it is so important to do a great bank reconciliation says Edmonton bookkeeping, is because the better it is done, the better tool it is to ensuring the information in it is accurate so that entrepreneurs can use the information to make better business decisions. The reason that so important, is because if entrepreneurs review their bank reconciliation, they know how much money they have in their business, which can help guide their purchasing decisions, understand if they have enough money in their business to run payroll. if entrepreneurs verify they have the money in their business to make various purchasing decisions, they can avoid running out of money in their business.
In order for entrepreneurs to do a bank reconciliation, they need to have their bank statements, record of all of the checks written in that previous month, and the previous bank reconciliation. Edmonton bookkeeping says that entrepreneurs need to enter into their bank reconciliation the beginning balance which should be the same as the final balance of the previous statements. This is the first step, and if entrepreneurs say that they are beginning balance this month is not the same as the previous month’s balance, then that means there have been errors, or additional transactions since the last bank reconciliation and entrepreneurs will need to re-reconcile the previous months balance.
Once the reconciliation report is done, Edmonton bookkeeping says that entrepreneurs will see that the balance shows them what the beginning balance is, all of the cleared transactions, the incoming deposits, the ending balance, any uncleared balances, and the registered balance. Entrepreneur should be very aware of all of these report items, and what they mean. For example, uncleared balances might be errors in the statement if they show up more than a month. Uncleared balances are debit or credit transactions that have not yet reached the bank, or they are checks that have not been cashed. However, if they appear more than one statements, it may be because they are is an error. Business owners who see this balance more than once should review all of the transactions to ensure it is not either a duplicate entry or perhaps an incorrect date was entered on the balance. Once they have a fix that error, it may take care of itself.
If entrepreneurs see that there is an uncleared balance that is not an error, they should find out why. For example, if it is a check that has not been cashed for a couple of months, the entrepreneur should call that customer and verify that they received it.
Entrepreneurs should ensure that they do what they can to have a very well done bank reconciliation, because the importance of looking at the information before they make any business and financial decisions. By getting into the habit of doing this, entrepreneurs can significantly avoid the problem of spending money that a business owner does not have in their business.