Often at Business Cents we are asked by bookkeeping staff at our client’s offices whether they really need to reconcile their QuickBooks accounts. They want to find ways to cut time from their accounting tasks and think this step is unnecessary. But they could not be further from the truth!
The reconciling process gives you confidence that your reports will be correct!
It is best to reconcile all your Balance Sheet accounts. These are the bank, credit card, loans, lines of credit and liability accounts. A good rule of thumb is: any account that gives you a statement is in need of reconciling. And don’t forget the Liability accounts! The statements you use for these are you tax filing reports, and the balances should match.
This step ensures that all the transactions in that account are entered and completed correctly. This provides the double check that you haven’t missed any transactions or entered any twice. It’s what reassures you that all the transactions are in the correct account.
The proper way to handle the reconciliation of accounts is using the banking reconciliation process, not simply checking off items in the check register. That will lead to other problems.
We can always tell quickly if the reconciliation process has not been followed because it shows up all over the financial reports.
Accurate and consistent financial reports delivered in a timely basis are a wonderful prediction of business success! You need to have a set of reports for your business that gives you information relevant to your business. You should have a schedule that your bookkeeper follows to provide these treasures.
To cut down the time required and set up a consistent workflow:
- Break down the Balance Sheet into segments, then …
- Rotate the months that reconciliation is completed on liability and less active accounts.
Don’t wait until the end of the year to get this all done! You simply won’t do it at the last minute. And remember, we are here to answer any questions you have about this process.
Happy Reconciliation to you!