Bookkeeping Services From $150 Per Month

No Catch Up Fees & Free Incorporation

Get Started

One of Edmonton’s highest rated Bookkeepers!

Edmonton Bookkeeping Icon 5 Stars

Read Reviews

Edmonton Bookkeeping Preferred Bookkeeper

Good morning. Again, welcome to another episode of always up to date. So y’all way it’s another week. And here we are again with another episode. And uh, so today we’re going to talk about how to reconcile a bank account. Uh, so just an introduction of who we are. So my name is Denise, um, and I’m one of the co owners of always Edmonton Bookkeeping. This is my colleague [inaudible] also the always. Yeah. Um, so as you know, we always start with a quote and a statistic. And so the quote today is from Michael Gerber, who’s the author of the book called E myth. Um, his quote is, uh, the work we do is a reflection of who we are. If we’re sloppy at it, it’s because we’re sloppy inside. If we’re late at it, it’s because we’re late inside. If we’re bored by it, it’s because we’re bored inside with ourselves, not with the work.

The most menial work can be a piece of art when done by an artist. So the job here is not outside of ourselves, but inside of ourselves. How we do our work becomes a mirror of how we are inside. So you always, sometimes, um, we just think bank reconciliations are so easy and you don’t have to like, there’s nothing to it. Um, but sometimes they can be kind of sloppy here. They’re just not done correctly, and that can cause problems later on near your end. Um, so the statistic that we have is 54% of all businesses have four employees or less. So you know, you start your small business and um, you might have four employees or less. Lots of times small businesses. It’s just one person. It’s just you. Um, and so most of the responsibilities are going to land on you as the owner with Edmonton Bookkeeping.

Um, so if you don’t have a bookkeeper, if you choose not to get a bookkeeper, then you’re going to have to do your own bank reconciliations. Um, so one of the jobs that you will do is the bank reconciliation and you really need to know how to do that bank reconciliation. So that’s kind of what we’re gonna look at today. Yeah, I do have some questions for you that you may want to ask yourself when you’re doing back reconciliations. So first of all, what do you need to reconcile your bank account? Okay. So, um, obviously you need bank statements. Um, first of all, you probably need a bank account and then you need vague statements for that account. This actually also works for credit cards. So if you have a credit card for the business, then you need to, um, you’ll need the statements for that credit card with the bank account and Edmonton Bookkeeping.

Um, something else that you’re going to need. And I think a lot of people miss this step is that you need the checks that if you’ve written any checks in that particular month that you’re reconciling, um, you need to have the checks or at least know what the checks are for, um, so that they can be posted to the correct ledger account. Okay. That’s right. Um, so even if you just have checks those, right? Yeah, yeah. Necessary. Cause then you’ll know, um, cause not necessarily all the checks that you’ve issued will show in your bank. And that’s kind of the purpose of having your bank reconciliation. Exactly. And lots of the banks will put the, like a copy of the checks on your statements. So sometimes there’ll be on there as well. So there’s different places that you can find those check stubs. Yeah. Yeah. Um, what’s, what software do you need to reconcile your bank account?

Yeah, so, um, again, there’s so many different softwares out there that you can use here at always Edmonton Bookkeeping. We use QuickBooks online, uh, which we find is very user friendly. It makes it a lot easier to do it. Um, but really y’all way you don’t even need software. You can just use an Excel spreadsheet if you want. Um, granted it’s a lot more work cause you’re entering everything, um, manually. But it is possible to use just a simple spreadsheet as well. Um, how can technology help you write and tell your bank account? Yeah. So, um, using the software is a good way to do it using a Excel spreadsheet. Those are all types of technology that can help you. Um, we find that with QuickBooks online, um, they have a bank feed so the bank feed will bring in the information and make it so much easier just to, um, to reconcile your account just takes away that manual input saves you a lot of time.

Yeah. Um, and um, they have a function where it actually teaches you how to do your bank reconciliation step by step. So, um, that’s, I mean it’s probably more common, um, before where it actually gets see some, uh, the steps on how to do your bank reconciliation and you can set up bank rules now so it would automatically, um, except that transactions, especially for the ones that re occurring. Yeah. Right. Yeah. Why do you use a bank feed? Yeah, so the main reason I think is the accuracy. Um, it pulls directly from your bank and so it’s going to bring in all of the transactions that have occurred in a certain period of time. Um, again, it’s going to save you time because you’re not having to enter everything manually. It’s already there for you. You just have to match it with the, um, what’s in your software Edmonton Bookkeeping uses?

Yeah. Um, how accurate is the bank feed? Yeah, we found that on QuickBooks online, the bank feed is pretty accurate. Um, you have to still watch and see what’s being entered and you have to compare it to your statement that you have. Um, we find too that a lot of times, um, it’ll just the same, um, transaction into the same ledger if you don’t check it. So for an example, um, if it’s for your bank, so it could be alone, maybe you’ve paid a bank loan back in that one. Um, and then the next one is for the bank again, but it’s a bank fees. Well, that bank fees may just go to the loan account as well. It’ll go to whatever the last one was unless you’ve set it up so that, um, recognize exactly, exactly. Yeah. There’s, yeah, there’s a lot of ways you can play around with it Edmonton Bookkeeping.

Yeah, that’s right. So it may take a little bit more time to get it set up in the beginning, but once you have it set up and going, um, the way you want it to, you have the rules set up and um, you get a little more comfortable with it. It’s so much easier to, um, to use, um, one information is entered into your bank reconciliation with Edmonton Bookkeeping. Yeah. So when you do a bank reconciliation, um, the main things that you’re going to need is you’re going to need your, you’re going to make me to make sure that your, um, beginning balance is the same as the ending balance from your previous statement. If that’s not correct, you need to go back and figure out why you’re going to have to go back and re reconcile the previous month or months to get that so that it’s, uh, accurate cause you don’t want to start reconciling your bank account if the beginning balance doesn’t even match.