We love accounting and could talk about it ALL day but…we know not everybody feels the same way. Today, we want to talk about something that we believe every business owner should know and do. What is it? Monthly bank reconciliations. But first, what does that even mean?

Reconciling an account means you’re making sure that the amount in the bank matches the amount in the books. By “books”, we mean your record of your income and expenses (whether it’s in Quickbooks, another accounting software, or just on a spreadsheet). The “bank” is any bank or credit card accounts you use for your business. Simple enough right? 

When we reconcile an account, we look at the bank statement for that month and check to see that each transaction is also recorded in the books. If the bank statement matches what’s in the books, then the account is reconciled! Woot! Go you! 

It’s not aaaaalways that easy though.

Sometimes, you’ll notice that your bank records don’t match your bookkeeping records. Whoops! There are a few reasons why this may happen…

• The transaction was not recorded on your books
• The transaction didn’t actually happen and shouldn’t be on your books
• The transaction was mistakenly deleted from your books
• There are duplicate transactions
• The amount recorded on your books may be incorrect
• The date of the transaction may be incorrect

Catching these mistakes is crucial to having clean books. And clean books matter because it’s nearly impossible to run a successful company with messy books because if you don’t know where your money is coming from and where it’s going, how can you possibly make smart financial decisions that result in you making even more money? Not to mention how stressful tax season is when you don’t have proper bookkeeping processes. 

Think you need more help? We’ve got options for you. 

If you still want to solo it, sign up for our QBO for Entrepreneurs course to learn all about DIYing your bookkeeping on Quickbooks Online: https://pattonaccounting.net/qbo. You can also follow along on Instagram: @qbo4entrepreneurs.

If you’re thinking, “I better let someone else take the reins here”…sign up for a discovery call and learn about our Accounting Packages. We’ve got you covered!