The reason why bank reconciliation reports are so important to entrepreneurs says Edmonton bookkeeping, is because they are a tool that they can use to understand how much money they have in their business. If they’re looking at these reports before they make any financial decisions, they can do so accurately and confidently, knowing that they have the money in their business to make those purchases or payments. In order to ensure that those reports are as accurate as possible so that business owners can be confident in their decision-making, business owners not only have to know how to do a bank reconciliation well, but they also have to know how to double-check it to ensure its accuracy.
One of the first things that entrepreneurs should do to verify the accuracy of their bank reconciliations, is that they are starting the report with the correct balance. If they are not, they could be doing all of the work to reconcile, and still not know how much money they have, or have thought they have a certain amount when they do not, because they have not verified that there starting it in the right spot. Edmonton bookkeeping says that because of that, entrepreneurs need to be very careful to ensure that the ending balance of their last reconciliation report matches the starting balance of their bank account. It is very important to do this first step, is that business owners can ensure the accuracy of the information from the beginning. If there are other errors that make their report slightly incorrect, at least it has not started from a place of error.
Not only should entrepreneurs be double-checking the balance on whether going to start the reconciliation report, but they also need to double-check all of the accuracies of the transactions that have been entered. Edmonton bookkeeping says that many entrepreneurs think that they do not need to check all of the transactions, which can actually trigger errors elsewhere. Especially if there is been a large number of transactions over the past period, they are going to want to verify the accuracy of that information. If they’re entering it by hand, there are many things that can be entered incorrectly that will trigger errors. The dates, the actual amount, and what the information was coded as. By double-checking all of this information, business owners can eliminate human errors from their reports.
Many entrepreneurs are using accounting software that can help them keep accurate books, Edmonton bookkeeping says that if they are, many of those software’s have features that help them automate the information. For example, QuickBooks Online allows entrepreneurs to sync up their bank account with the software so that all transactions are automatically entered into the software. Even if entrepreneurs are using this, they still need to double-check the information to verify its accuracy. This automation can improve the speed and accuracy of the information, which does not replace the need for double-checking. By having a double-checked bank reconciliation report, business owners can confidently use that information to make great business decisions.
It is not just enough for entrepreneurs to be doing the reconciliation report, they need to do it well and double-check for accuracy says Edmonton bookkeeping. Doing it consistently and doing it correctly can help business owners use that report before great financial decisions. In ensuring its accuracy month-to-month can help entrepreneurs ensure that they continue to have the most accurate information no matter where in their fiscal year they are making that financial decision.
Not only is it important for entrepreneurs to ensure that there starting their bank reconciliation where the last one left off, and to double-check all of the transactions that they have made, they also need to double-check their report once they are done it, to ensure that they have done it as accurately as possible. Edmonton bookkeeping says that it is very easy for entrepreneurs to do that final double-check. If they are not, they could be missing out finding where errors have been, which makes all the work that they put into doing the reconciliation report to the first place, not at work.
In order to verify that they have done the bank reconciliation report correctly, it is to look at their ending balance and double-check that it matches their bank statement. If those two totals match up, the second double-check system they can use is to look at their registered balance on the reconciliation report. This should match the GL for their bank when they look at their balance sheets. If that also matches, business owners, will know that they have completed the bank reconciliation report properly.
These double-check systems are extremely important to ensure the accuracy of the report, and when entrepreneurs are ready to reconcile the next time, they should go back and double-check that the statement still matches. Edmonton bookkeeping says that if the change was made, it could cause the reports to be slightly out. To eliminate this possibility, entrepreneurs should be double checking the report from their starting balance so that they can be sure that they are starting this report accurately.
This may seem like a lot of double-checking to many business owners, but it is extremely important that these double-check systems are done consistently and often so that they can ensure the accuracy of the reports to help guide them make better business decisions, and it is also better to catch the mistakes month-to-month, then not catch them and force their accountant to have to fix all of the errors at the end of the year. These double checks can also ensure that the information that the business owner has their making financial decisions in their business with is as accurate as possible so that their decisions can be as informed and as good as they can possibly be.