If you’ve been shopping around for bookkeeping services, you’ve likely seen Account Reconciliation listed as one of the services offered. But what is it and do you really need it?
What is Account Reconciliation?
Account Reconciliation is simply a fancy way of saying balancing your business bank accounts and credit card accounts! It’s just like balancing your personal checkbook. You do that every month, right?
If not, here’s a little refresher. Account reconciliation is matching up the monthly bank statement to the transactions that you’ve recorded on your end. It’s making sure all of the deposits that you think went into your account, actually did. It’s confirming that all of the purchases and expenses you paid for with that account, have been posted to your account. Nothing more, nothing less.
You may be thinking to yourself, “Kim, is this really necessary?” Yes, it is and here’s why.
Everyone makes mistakes, even people that work at banks! It’s happened to me!
My husband and I own a small retail shop together and we deposit the previous day’s cash and checks every day. A couple of years ago, I noticed that one of our deposits didn’t post to our account. I went back to the branch where the deposit was made and asked the manager to look into it. One of the checks we had included in the deposit in question was for a mutual customer that the bank and our business had. When processing our deposit, the teller has mistakenly typed in the account number on the customer’s check instead of the account number on our deposit slip. Oops! That innocent mistake could have cost my business hundreds of dollars.
Another reason account reconciliation is necessary is to help protect you and your business from fraud. Just last week I tried to use my company’s debit card and the charge was denied. I called my bank to find out why and I learned that there were a couple of attempted charges that they picked up as fraudulent. If they had let those charges go through and I didn’t reconcile my account, I would have been out hundreds of dollars. That is not a risk I can afford to take and I’m guessing neither can you!
Don’t have the time to reconcile your accounts?
I would love to help you! Believe it or not, I think reconciling accounts is one of the best parts of my job! I love seeing the green check mark in QuickBooks Online when an account balances. I’m a nerd, I know! 🙂
Contact me today to schedule a free 30-minute consultation! I look forward to talking with you!