Reconciliations of bank accounts and credit cards are crucial for accurate bookkeeping records. If you don't perform these reconciliations on a regular basis, your decisions may be based on false information, which may cause problems for your company's cash flow.
Reconciliations of Banks
Comparing the data from your bank statements and accounting records is known as a bank reconciliation. This procedure guarantees the accuracy of your books.
Bank Reconciliation Statements' Benefits
Errors are frequently discovered in financial accounts. Occasionally, fraud is the cause, but most of the time, mistakes are made. However, these mistakes can be expensive. One big benefit of bank reconciliations is being able to identify them.
Other advantages include:
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Identifying inefficiencies in the business
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Ensuring statements and payments aren’t misplaced
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Ensuring your finances are safe
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Developing processes to prevent frequently made mistakes
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Knowing your tax reporting is correct
Additional Advantages of Reconciling Bank Accounts
Moreover, comparing transactions can assist you in managing bank fees. Reconciliation will reveal any charges you may have received from your bank, such as for overdraft fees or failing to maintain a specified balance. You'll be able to monitor the situation and take action to make sure the fee is never applied to you again.
In the end, your bank reconciliation statement will assist you in making sure that transactions are accurately recorded, identifying fraud early on (though it's uncommon), and avoiding bank errors and needless fees.
21st Century Reconciliation of Banks
Cloud accounting has made bank reconciliation simpler than before. Your transactions are automatically recorded and entered into your accounting system. Errors and inefficiencies can be swiftly detected during the reconciliation process, which the software can help with effectively. Having this information at your disposal will enable you to make sound business decisions based on precise financial information.
Credit Card Reconciliations
Everyone makes mistakes—intelligent automated software included—but it's critical to identify them before they become costly or you decide something based on false financial information.
In order to identify errors or erroneous charges, credit card reconciliations entail comparing your records with your monthly credit card statements. They come in handy for:
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Finding fraudulent transactions, unapproved purchases, and inaccurate posting amounts
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Maintaining a log of your company's debts
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Documenting purchases
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Reducing late fees and interest
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Assembling a precise general ledger
Make sure that employees who have company credit cards give you their expenses if they have any. To make this easier for you and your team, we prefer to use cloud-based software. Simply snap a picture of the receipt, and our internal procedures, integrations, and systems will take care of the rest.
You can be confident that the right information is appropriately reflected in your financial data once your credit card has been reconciled. With this knowledge, you can make decisions that will boost your company and provide you with peace of mind with confidence.
Become in Charge of Your Finances
Any competent bookkeeper, particularly one who is a member of the Canadian Payroll Association and the Certified Professional Bookkeepers of Canada, can keep your books current. However, even with a precise set of books, you most likely require some financial direction and counsel.
We are available to you. Our skilled staff provides support as part of every package we offer. We can forecast to help you stay out of trouble, and we'll notify you of which payments are due and when they're due. You obtain an important and vital line of sight into the financial well-being of your company with Platinum Bookkeeping and Tax.
Get in touch with us right now to begin breathing easier.
