There are several things that entrepreneurs should keep in mind when doing their bank reconciliation reports, and Edmonton bookkeeping says that the most important thing to keep in mind is to do it well. If entrepreneurs think that bank reconciliations are so easy and they do not have to be careful, they can end up having the sloppy reports that can trigger bigger errors farther down the line. Entrepreneurs should not only be careful and methodical when doing their bank reconciliations, but they need to do them regularly and double-check for accuracy.
In order to do great bank reconciliation, business owners should verify that they start with the right information. Having a copy of the most recent bank statements, a record of all of the checks that an entrepreneur has written in the last month, as well as report of the last bank reconciliation they did. Edmonton bookkeeping says that business owners should start by verifying the accuracy of a nation that they are starting with. By reviewing the ending balance of the last reconciliation report and ensuring that it matches the opening bank statement balance, business owners can be certain that the continuity from one report to the next is being maintained.
An entrepreneur will need to enter all of the transactions that have been made in the business for the last month. This includes all incoming and outgoing transactions as well as all of the checks that have been written. If entrepreneurs are using accounting software called QuickBooks online, they can automate part of this process says Edmonton bookkeeping. They can link up their bank account to the software, and every time there is a transaction, it will update the software in real-time. This way, business owners do not have to manually enter all of those transactions. If they have had a very busy month, the more transactions that they have can mean a lot bigger job of entering those transactions. Using the automated process can significantly help them save time as well as ensure the information is more accurate because there eliminating the element of human error.
If an entrepreneur has decided to use the automated bank feed feature, Edmonton bookkeeping says that it is extremely important that business owners should review each transaction for errors, because technology is not infallible. By double-checking all of the entries against their bank statement, they can ensure that no errors have been made and that the bank reconciliation reports will end up being as accurate as possible.
By being very methodical in doing the bank reconciliation report, business owners can be certain that they are creating the best report, that can help them understand how much money they have in their business, so that any time they go to make a payment or disburse money, they can be confident that they have the money in their business to do so. By always ensuring they have money any time they make a payment, they can avoid running into a lot of financial problems that have plagued other businesses.
Bank reconciliation reports are extremely important to businesses says Edmonton bookkeeping, because it can help entrepreneurs understand how much money they have in their business to use. Entrepreneurs should get into the habit as early as possible of running these reports before any time they disburse any money in their business. If they can get into this habit early, they can avoid making financial decisions that can cause problems by not having enough money. Setting aside time in their schedule to do their bookkeeping on a regular basis, as well as scheduling all of their payments, can help business owners do a great bank reconciliation regularly.
When an entrepreneur is going to do their reconciliation report, they need to verify that they are starting off the current report where the last report and it off. The first step entrepreneurs should do before starting the reconciliation, is verifying that the ending balance of their previous reconciliation matches the opening balance of their bank statement. Edmonton bookkeeping says that if this does not match, entrepreneurs should stop and we reconcile the previous month. If additional transactions happen at the end of the month after an entrepreneur had finished the reconciliation, it could cause the reports to be out. Therefore, it is very important that business owners do that double-check, to ensure that the accuracy of the information is kept up to date.
Once an entrepreneur has finished the reconciliation report, they also need to verify the accuracy of it. Edmonton bookkeeping says that that is easily done by looking at the report, and double-checking that the ending balance matches the ending balance on the bank statement. If that is correct, they should look at they registered balance in the reconciliation report and verify that it matches the GL for their bank in their balance sheet. If both things match up together, a business owner should be certain that the bank reconciliation was done properly.
It may seem like a lot of additional work to do all of the double checks and verification processes, but those double checks are going to be what ensures the accuracy of the information. Doing those reviews are going to help entrepreneurs in ensuring the information in those reports are accurate, which should give them confidence that the reports are accurate so that they can make financial decisions they need.
By getting into the habit of doing reconciliations on a regular basis, entrepreneurs can ensure that there avoiding the reason why 29% of entrepreneurs failed, because they ran out of money in their business. Not only should entrepreneurs learn how to do a bank reconciliation report, learn how to do it well, so that they can ensure that they have the best information possible to guide all of their decisions so that they can make the best possible financial decisions possible.