Time to discuss everyone’s favorite topic: BANK RECONCILIATION! Reconciling is a fundamental accounting process to maintaining accurate, compliant and complete records. in fact, we will not accept clients’ unreconciled records. Reconciliations ensures that money amounts received and spent is the same across all your accounts, banking credit card account, etc. Whether the regular reconciliation interval is weekly, monthly, or quarterly:

Good Reconciliation Protocol Will:

  1. Quickly Identify fraud and/or theft from your company.
  2. Detect suspicious activity early-even before your financial institution notices wrongdoing on your accounts
  3. Validate data entry

Use this checklist when you reconcile your accounts:

  1. Are there any unauthorized checks?
  2. Are authorized checks duplicated or changed in any way?
  3. Are there unauthorized transfers or charges out of the account?
  4. Are deposits missing from the account?

These are all reasons to reconcile and not skim your statements.

Equally important is identifying data entry irregularities such as:

  1. Incorrect amounts or dates, transposition errors Duplicated or omitted entries, and more
  2. Although bank download features where bank or credit card activity is downloaded directly into your accounting software is generally accurate, it is not unheard of for duplication and errors to occur. And that brings us to our final reason.

Reconciling is the guardrail between under or overstating your revenues and expenses.  It confirms the accuracy of your financial statements (such as our balance sheets or profit and loss statements).

Good reconciling protocol will ensure unnecessary tax scrutiny while guaranteeing the best tax outcome. However, simple reconciliation errors can become complex (and costly) problems when passed along to your accountant and then to tax authorities. If you or anyone you know is uncertain of whether your books are properly reconciled, feel free to reach out to setup a bookkeeping discovery session by emailing Info@markperlbergcpa.com.