Being up to date with your accounting records is vital when you own a business entity. It is common for the accounting process to take a few days or even weeks, depending on your business size and accounting system. While checking the financial records, it is essential to fill in all of your income and expenses using the double-entry accounting method.
Once you are done with this, you must reconcile your balances with the bank statements. However, all these tasks can be daunting if you have lots of other responsibilities.
This is when doing a search for “bookkeeping services near me” will come in helpful. You will be able to find a bookkeeping service that can help you handle your finances efficiently while also providing you with a much-needed break.
But before that, let us understand what Bank Reconciliation is and how a company offering bookkeeping services can help us.
What Is Bank Reconciliation?
Bank reconciliation represents a comparison of the information contained within a company’s general ledger and its corresponding bank statement. In a perfect situation, the balances in your accounting records will match your bank account balances.
If there is a difference, it needs to be researched until you find out where the money went. The process of reconciling allows you to ensure that each entry in QuickBooks is valid. It is beneficial to start with your accounting system if you haven’t reconciled your accounts for a long time.
How to Reconcile Your Bank Accounts?
Typically, this involves downloading bank transactions into QuickBooks through the bank’s website, adding them to your register, and then comparing that information to what shows up in your bank statement.
Using accounting software like QuickBooks (a bank reconciliation tool) will help you compare the information and find any discrepancies.
Use your list of all transactions you have entered in the accounting software by date and find these transactions on the bank statement.
Check that there are no additional transactions that you may not be aware of or missing transactions that should still show up. If any transaction is missing, you will need to find the reason for that.
When it comes to unknown or missing transactions, often different amounts than what is listed in QuickBooks or on the bank statement, you will need to research to figure out where the money went.
It may involve calling vendors if there are any payments related to your business, looking over your receipts, or other expenses that should match up to QuickBooks.
You could also consider googling “bookkeeping services near me” and finding a reliable and trustworthy bookkeeping company to outsource your bookkeeping and accounting needs, so you can focus on the core aspects of your business. The company you hire can take care of these tasks, saving you time and money.
What Do You Need to Know About Reconciling Your Bank Accounts?
At the end of this process, you may want to know how much money is in your bank account and make sure that the large withdrawals were made with your permission and supervision. If you find a difference, use the information from your bank account to adjust the QuickBooks balances.
You need to know all of the transactions that have been processed through your bank account. You should understand what items are cleared by the bank daily, how often your bank clears transactions and any fees that might apply.
The frequency of how often your bank clears information depends on what type of account you have. If it is an individual checking account, the funds should generally be available to use almost immediately after you deposit them. It means that there are no additional steps before using those funds.
It is vital to know when your bank’s transactions in QuickBooks were cleared and if it varies from when they were entered into the system. Business transactions may take longer to clear, as there are more steps in the process.
It is typical for a business checking account to have same-day availability, but it may be longer for some. In addition, any fees your bank charges should be considered, as well as how often they charge these fees and how much these fees would end up costing.