If entrepreneurs understand the importance of reconciling their bank account properly, Edmonton bookkeeping said may be more entrepreneurs would take the care to do it properly. Since a proper bank reconciliation can ensure a business owner has enough money in their business to spend it, either taking dividends of their corporation, running payroll or dispersing payments, it is an important step that should happen before any time a business owner spends money.
There are only a few things that an entrepreneur needs to have in order to properly reconcile their bank account says Edmonton bookkeeping. All they need are there bank statements, a copy of all the checks that have been written in the last month, and the previous bank reconciliation. While business owners are able to do a bank reconciliation without any special software, QuickBooks online is a favorite amongst business owners and bookkeepers, because of the user-friendly nature of it, as well as several features that help entrepreneurs automate entering transactions.
One of the features that many Edmonton bookkeeping companies have come to really enjoy is the bank feed feature. What this does is allows an entrepreneur or bookkeeper to connect the bank directly to the QuickBooks online. Every transaction that happens in bank account updates QuickBooks online in real-time. What this does is helps a business owner have all of the transactions that have been done to date entered into the software. This makes their bank reconciliation much easier.
An entrepreneur also needs to keep in mind however that the automatic feed is nice, but it is not infallible. Because of this, entrepreneurs should be reviewing their bank statements with all of the transactions in QuickBooks Online. By doing this, entrepreneurs can catch any errors that might have been made. Many entrepreneurs wonder why they should worry about this automatic feed when they still have to verify the accuracy of the information. Edmonton bookkeeping says that even with double checking all of the information that gets entered in through bank feed, it is still faster and more accurate than manually entering all transactions.
By ensuring the accuracy and speed of the bank reconciliation, Edmonton bookkeeping says entrepreneurs can use that additional time saved into double-checking the accuracy of the information. The reason why it is so important to have the most accurate reconciliation possible is so that entrepreneurs can have the best information possible to make their financial decisions.
By spending the time to do their bank reconciliation properly and double-checking its accuracy, entrepreneurs can ensure that the final reports that they end up with, are a true reflection of how much money is in their business, and whether they are using that information to disburse payments, take payroll, disburse dividends to themselves, or plan asset purchases, this can be very powerful tool for entrepreneurs to use to help them avoid running out of money in their business. By doing this properly, entrepreneurs can ensure they are not going to making financial decisions that put their business at risk.
It is not just enough that an entrepreneur learns how to do a bank reconciliation properly says Edmonton bookkeeping. Also extremely important that an entrepreneur learns how to check that bank reconciliation as well. If an entrepreneur takes the time to do bank reconciliation, they should also spend a few extra minutes it will take to verify the accuracy of those reports because those reports are an important tool for entrepreneurs to use in their business to help them spend money properly. Taking the time to verify the information can help entrepreneurs have the best tool possible.
Once an entrepreneur has done their bank reconciliation, how to check it for errors says Edmonton bookkeeping is looking at the ending balance to see if it matches ending balance on their bank statement. If that is correct, Edmonton bookkeeping says the next step they need to do is look at the registered balance. The registered balance should match the GL for business owners’ bank on their balance sheet. If both things match up properly, the business owner has properly verified that the bank reconciliation is done properly.
It is not just enough that an entrepreneur verifies that it is done properly and then start the next month without checking, business owners should get into the habit of looking at their previous month’s balance to verify it matches the starting balance of this month’s bank statement. By always ensuring they are starting each month by looking at the previous month’s balance, and ten bookkeeping says that entrepreneurs can ensure that there ensuring the accuracy of the information month to month. The last thing that an entrepreneur should do assumes it is accurate, and then at the end of the year have their accountant discover errors that will then take several hours and a lot of money to have to fix.
In order to help them have the right information to do bank reconciliations, business owners need to ensure that they are keeping an accurate and up-to-date record of all of the checks that they write in their business. Many entrepreneurs believe that they should be able to look at their bank balance and look at all of the checks that they have written that have clear their bank account already in order to do their bank reconciliation. Unfortunately, by doing that, they may be missing important information. Because not all checks are going to clear immediately, by looking only at the cleared ones, business owners could be missing accounting for checks that they have written. By doing this, entrepreneurs are putting their reconciliation at risk for showing that I have more money in their business to use they actually do it
Running a bank reconciliation is not difficult says Edmonton bookkeeping, it just means that a business owner has to be careful, in order to ensure its maximum accuracy. Getting in the habit of doing this well, can mean a significant difference in knowing how much money the entrepreneur has to spend.