3 Reasons You Need to Reconcile Your Bank Accounts Monthly


By Amanda Karen | CrunchSum



reconcile bank statements1

Reconciling your bank accounts (including credit card accounts) each month in QuickBooks is one of the easiest ways to confirm that your financial data is accurate. Yet, many business owners who do their own bookkeeping, do not practice this. So, why is it a good idea to reconcile your bank accounts each month?

    1. Validates Data Entry

    Reconciling your accounts each month will help identify data entry errors. One error example includes missing transactions (transactions that appear on your bank statement, but were never entered in QuickBooks). Another includes incorrectly recorded transactions (i.e. transactions that were recorded in QuickBooks to the incorrect bank account or transactions that were entered with the incorrect amount).

      2. Confirms Financial Statements Are Accurate

      Reconciling your bank accounts each month confirms that all transactions that have been recorded on your bank statements have been entered into QuickBooks. This means that your financial statements accurately reflect sales and expense activities.

        3. Accurate Tax Reporting

        The financial data you enter into QuickBooks is what you use to prepare your annual tax return. If you have not been reconciling your bank statements on a regular basis, it is very likely that your financial statements are not accurate. This will lead to reporting incorrect figures on your tax return.

          Conclusion

          Even if you have low transaction volumes, you should still be reconciling your accounts each month. This will help to avoid unnecessary headaches down the road. Are you convinced yet? Save yourself the hassle and complete this task on a monthly basis.


            What are some other reasons that reconciling on a regular basis is helpful? How has reconciling/not reconciling your bank statements monthly affected your financial information? Please leave us a note below!


            CrunchSum provides web-based bookkeeping and QuickBooks support services to web and technology companies.


            Image Attribution || CC by 2.0


            Next Post
            Previous Post

            2 thoughts on “3 Reasons You Need to Reconcile Your Bank Accounts Monthly

            1. Very true. If you don’t reconcile regularly, then you will never find errors, and may have security issues with your account. This happened to me with my Paypal. Someone tried to hack it and fortunately it was caught before the money transferred out. That was a scary feeling.

              • Yes, this is just one more reason to reconcile your accounts monthly! It’s great to hear that you are on top of your monthly account reconciliations, Zeke. Thanks for the comment.

            Leave a Reply

            Your email address will not be published. Required fields are marked *

            You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>