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When entrepreneurs are making financial decisions in their business, whether it is disbursing payments to vendors, running payroll, or making an asset purchase, Edmonton bookkeeping says they should ensure that they have the money in their business to make those purchases. Since half of all entrepreneurs fail within the first five years of their business, and 29% of those entrepreneurs run out of money is a reason why their business failed, helping business owners avoid that pitfall is extremely important. Running bank reconciliations before any time they use the money in their business can significantly help business owners avoid spending money they do not have.

In order to do great bank reconciliation, entrepreneurs only need to have three things: their previous bank reconciliation, a list of all the checks that have been written in the past month, and their bank statements. Edmonton bookkeeping says that that is all the information that business owners need in order to do a bank reconciliation, and well technology like using software like QuickBooks Online can significantly help entrepreneurs, you do not actually need any special software because they can use an Excel spreadsheet to ensure that they have the money in their business.

When an entrepreneur is working on their bank reconciliation, but they need to verify as they start, is that their current bank statement has an opening amount that is the same as the ending balance of the previous bank reconciliation. If these two totals do not match up with each other, Edmonton’s bookkeeping says that the business owner is going to need to re-reconcile the previous month’s balance. It is extremely important that this step is not missed so that the entrepreneur can verify that month-to-month the reconciliation reports are accurate. If this step is missed, business owners not only is getting an inaccurate statement about how much money they have in their business, but it will mean that there could be significant errors at the end of the year that their accountant will have to fix.

Once they have completed their bank reconciliation, they should verify that it is correct before utilizing that information. How they can check that, is to see what they are ending balance is on their report and verify that it matches the ending balance on their bank statement. If that is correct, then they should look at the registered balance and verify that it matches the GL in their balance sheet. If both of those matches, an entrepreneur can be certain that the bank reconciliation is done accurately.

By doing reconciliation very well and often, entrepreneurs can be certain that it is accurate, and they can use the information to help guide them make purchasing decisions in their business. This way, they can avoid making financial decisions that would cause them to bounce payments. Into the habit of doing this consistently can significantly help business owners ensure they have the money in their business regularly.

it is extremely important that entrepreneurs stay on top of their Edmonton bookkeeping tasks so that they can be certain that their financial records are being Current and accurate. Not only should entrepreneurs be putting into their schedule regular times to work on their bookkeeping, but they should also be ensuring that they are doing a bank reconciliation before every payroll, and before they disburse any payments in their business. Getting into the habit of doing this consistently, can help entrepreneurs make confident financial decisions in their business.

One way that entrepreneurs can not only ensure the accuracy of their bank reconciliation but also help do it quicker is by using QuickBooks online. Edmonton bookkeeping says that this software is user-friendly and intuitive, but it also has features that help automate bookkeeping processes. For example, the bank feed feature allows business owners to link up their bank account with their software. Every time there is a transaction in that bank account whether it is incoming or outgoing, entrepreneurs will know that that is automatically and in real-time updating in their software.

When an entrepreneur is ready to do their bank reconciliation, all they need to do is review all of those transactions for errors. Comparing it to their bank statement, entrepreneurs can be certain that the entries were made correctly. And even with the double-check, this automation helps entrepreneurs do their bank reconciliation faster, easier and more accurate and if they were manually updating all transactions themselves. All business owners need to enter after that, are all checks that have not already cleared their bank account.

It is very important that when they start, entrepreneurs verify that the beginning balance is going to match the end balance of their last bank statement. The reason this is so important, is because if there were additional transactions that cleared after the last reconciliation, the business owners going to have to re-reconcile it to ensure that there always starting the balance where the last one ended off. Edmonton bookkeeping says that this is an extremely important step that cannot be missed, to verify the accuracy from one month to the next.

If an entrepreneur gets into the habit of doing this every time they are going to make financial decisions in their business, though able to use it is a great tool to know that they have the money in their business to make those decisions. One thing that might help an entrepreneur save significant amounts of time, is minimizing the number of times they have to do this bank reconciliation. By scheduling all of their payments and payroll to come out twice a month, business owners can ensure that all of their payments are being made, that their payroll is happening, and they are minimizing the amount of time that they have to spend doing bank reconciliations. This way, Edmonton bookkeeping says that entrepreneurs can ensure that their books are being kept up-to-date while minimizing the amount of time that they actually have to spend doing that work.