One of the most important things that entrepreneurs can do says Edmonton bookkeeping, is to keep up-to-date financial records. Business owners should ensure that they are setting aside time on a regular basis to take care of their bookkeeping, especially if they are doing it themselves. Ensuring that they have time set aside to do it can help business owners actually do it and not put it off thinking that they will get more time to do it later. Also, if entrepreneurs set aside time in their schedule to have it done, the be less likely to rush through it and make errors. One of the more important things that business owners can do is bank reconciliation. This does not need to take a lot of time, but when it is done well, business owners can verify that they have the money in their business to make various financial decisions such as paying their staff, taking dividends out of their corporation, or making purchases for their business.
There is only three things that entrepreneurs need in order to do a great bank reconciliation: they need to have a copy of all of the checks that they have written in their last month, they need the current bank statements, and they need a copy of the bank reconciliation port from the last month. Edmonton bookkeeping says that not only is it important that business owners have these three things, they also need to be verifying that they are starting their current bank reconciliation where they left off. Therefore, an entrepreneur must look at the beginning balance on their bank statement, and verify that it matches the ending balance of their previous reconciliation report. When entrepreneurs do this, they are ensuring that the continuity from month-to-month is kept accurate, which not only can help them avoid errors in their bank reconciliation and ensuring that they know how much money they have in their business to make financial decisions, but they are ensuring the accuracy of the information overall, so when they get their fiscal year-end, that have a greater chance that their financial records are accurate so that their accountant does not spend as much time fixing errors.
When an entrepreneur is done their reconciliation, they need to check it for accuracy. How they can do that, is check the ending balance to verify that it matches the ending balance of their bank statement. If that is correct, Edmonton bookkeeping says that entrepreneurs should then look at the GL for their bank in their balance sheet and see that it matches the registered balance in the reconciliation report. Once they have done this, entrepreneurs can ensure that their reconciliation has been done properly. Edmonton bookkeeping says that business owners need to always start with a double-check and end with a double check to verify the accuracy of the report.
When entrepreneurs can get into the habit of not only doing their bank reconciliation but doing it well and accurately, they can end up having a great tool that can help them make better financial decisions in their business.
If entrepreneurs do not understand why they should do bank reconciliations says Edmonton bookkeeping, they may either not do them well, or not do them at all but you could cause them to have larger financial problems. Since 50% of all entrepreneurs fail in business within the first five years, and 29% of those entrepreneurs say the reason why their business failed is that they ran out of money. Well done bank reconciliation reports can help entrepreneurs avoid spending money that they do not have in their business.
While it is not absolutely necessary for entrepreneurs to have fancy software to help them do bank reconciliation, it can be done using any sort of spreadsheet, but using the rights software can help entrepreneurs not only save time but ensure the accuracy of their information. This is extremely important if entrepreneurs have decided to do the bookkeeping themselves. Edmonton bookkeeping says that QuickBooks online is a great software that can help entrepreneurs because of its automated features such as bank feed. What this feature does, is it allows business owners to sync up there business bank account with the software. All transactions in that bank account whether it is incoming or outgoing transactions are manually entered into the software.
This eliminates the need to manually enter all transactions manually, which can save significant amounts of time. Especially if an entrepreneur has had an extremely busy month, not having to enter all the information by hand can save lots of time, and removes the human error element from this part of the bank reconciliation process. Edmonton bookkeeping says that after business owners sync up their software to their bank account, all they have to do is verify the accuracy of the information, and check all entries against their bank statement. Even with this double-check system in place, it is far faster to automate than entering in all by hand.
Once an entrepreneur has entered all of the transactions and checks into their bank reconciliation, they reconciliation report will show an entrepreneur but the beginning and ending balance is, all cleared transactions as well as uncleared transactions. Edmonton bookkeeping says that it is extremely important that entrepreneurs are being aware of everything that is showing up as an uncleared transaction on this report. If it appears more than once, it is typically an indication of an error that business owners need to fix. Since most transactions like credit card purchases or point-of-sale purchases only take a couple of days to show up on the bank account statement, if business owners have uncleared balances appearing on more than one statement, they should verify the accuracy of the information. Perhaps a date was entered incorrectly for it was a duplicate entry. If it was, in fact, a check, business owners should check with the vendor who has the check to ensure that they got it and if they did, ask why have not they cashed yet.