My Blog

Blog

Bank Reconciliation and the Benefits of Reconciling your Account.

Posted on August 18, 2020 at 2:57 PM













 YESSSSSS!!! That Beautiful Moment when you finally reconcile an Account, especially after battling with the Account for a while - PRICELESS!!! In Case, you are wondering what Reconciliation is. Reconciliation is the Process of ensuring that your Accounting Record agrees with your Bank Statement. 
 
 Performing Bank Reconciliations helps you spot out Fraud and Reduce the risk of transactions, that can cause late fees and penalties. The Following are the Advantages of Bank Reconciliation:
 
   1) It makes Accounts to be in Good Standing - It makes your Account to be in Good Standing. When you reconcile your Bank Account, it helps you to be aware about the Amount that you can spend in your Account, so that you are less likely to overdraw your Bank Account. You need to keep in mind, that overdrawing will negatively affect your Credit Score and can prompt the Bank to charge you fees. 
 
  2) It Prevents Theft - Recording Bank Fees is a Standard Practice as you process your Reconciliation and it may reveal a transaction, that you have overlooked to record. By examining further, the available original documents, these discrepancies will be revealed. Most Importantly, it will reveal the Bank transactions, that were initiated by unauthorized individuals, who try to steal money from your Bank Account. 
 
  3) It Helps you detect Accounting Errors - There can be some cases, where your Bank commits an error in your favor, and this will make you liable to return that money, even if you've already spent it. By Reconciliation, you will be able to detect accounting errors that commonly occurs in Business, such as Double Payments, Addition and Subtraction Errors, Missed Payments and Lost Checks. 
 
  4) It keeps Mistakes in Check - Banks are usually responsible for implementing procedures to avoid making mistakes in your Bank Account; unfortunately, mistakes do happen sometimes, with the most common being a Simple entry error. Nevertheless, Banks will be able to correct these mistakes when you point them out, after you complete your Bank Reconciliation. 
 
  5) Need to Record Interest Earned - Businesses may think, that they are Small, so recording their Interest maybe minor. It is important to keep precise track of smaller details, since these can add up over time. Also, It may not seem important now, but as you earn more money and your Principal grows, your interest may become significant enough that it affects your bottom line. 
 
 6) It reduces Missing Transactions - We have seen several instances, where Banks may refuse to deposit your Check for reasons like you have drawn on a Foreign Bank Account. This may require them to reverse the original entry on a Deposit. Bank Reconciliation is carried to introduce transparency and efficiency into a Business's Accounting System. 
 
 7) It helps to identify Duplicate Charges - Reconciling your Bank Account helps to identify duplicate charges, that may be erroneously charged in your Bank Account; It also helps you to recognize unauthorized charges and incorrect posting amounts, thereby reaching out to the Merchant Companies and informing them to refund these charges. 
 
 8) It detects and prevents Embezzlement of Funds from your Company - Reconciling your Account helps to detect Fraud and embezzlement of funds from your Company. You are able to track every transaction and determine, where they are coming from, where the funds are being allocated to and if they were wrongly allotted. 
 
 9) It Helps Business Owners make Sound Financial Decisions - Reconciling your Bank Account helps Business Owners to make sound financial decisions about the growth of their Company and helps to identify particular product lines, that maybe non-profitable. 
 
 10) It helps you track your Accounts Receivables - Cash is King. Reconciling your Account keeps you on top of your Account Receivables; It helps you know the true Amount, that your Debtors are owing you. Reconciling your Account allows you to track your Invoices and reach out to your Debtors to make Payments promptly. It helps to ensure that you always have Cash available in your Bank Account. 
 
 11) Reconciling your Account helps you produce Accurate Financial Reports, needed for your Loan Application - Due to the Pandemic, a lot of Businesses have to rely on SBA Loans and Government Stimulus to help their Businesses stay afloat. Having a Reconciled Account helps you produce Accurate Financial Reports, that can help you obtain these Loans easily, without hassles. 
 
  Are you Reconciling your Account Regularly? Are you overwhelmed with your Reconciliation? We have the latest Accounting Software to help you and Guess What? We can set one up for you as well.
 
Give us a Call on 202-422-4586 and We'll help you out. 
 

 

Categories: accounting, bank loan, bank reconciliation, bookkeeping, COVID-19, covid19, Intuit, loan documents, paycheck protection program, PPPloan, QuickBooks Setup, QuickBooks Software, quickbooksproadvisors, reconciliation, SBA Loan, small business owners, stimuluscheck, stimuluschecks, stimuluspackage, taxes, taxseason

Post a Comment

Oops!

Oops, you forgot something.

Oops!

The words you entered did not match the given text. Please try again.

16 Comments

Reply Ashley Brad
6:57 PM on August 20, 2020 
Thanks for sharing these Useful and Informative Tips. They are really helpful. Will surely implement Bank Reconciliation in my Accounting System. I would also love your firm to help my Company.Thanks.
Reply xvCdWBgZne
3:38 AM on May 22, 2021 
WAeEoZTmI
Reply dUPQZToLeKY
1:36 PM on June 23, 2021 
nWAfHrSzehJo
Reply cifyVnZqwMRpuzk
11:19 PM on September 13, 2021 
KaMVgqLldAkeFwuj
Reply nxtgsbXBKJOaCeUq
7:49 AM on September 30, 2021 
kTjpuIBWzro
Reply OGiXoqYBFtAEjk
5:46 PM on October 22, 2021 
cHTXxmKVg
Reply NyschCoDZ
5:57 AM on November 1, 2021 
ylATSvBFoWus
Reply yHGvqLkxtO
4:51 PM on December 17, 2021 
sSJAlqUTcv
Reply VvEoAaxBYzQK
8:33 AM on March 4, 2022 
URZTWEBJNgMq
Reply dFrXzKMefPClHRs
6:06 PM on April 7, 2022 
uebxJQsfgvNA
Reply DYWRAlgJHzIvVcnS
2:30 AM on April 13, 2022 
FapoXyghsW
Reply GzVwoSkxKLlNQPs
1:56 AM on April 27, 2022 
NsYnrTwbEftjhlIC
Reply DoFIHZLkXbpB
10:08 AM on May 29, 2022 
PJfWFtLnCAIQNX
Reply matPLduHZBopNjeJ
6:58 AM on June 25, 2022 
yGrhklefgTtFYD
Reply SPkiRcopCgm
2:40 PM on August 12, 2022 
wOektiGRWDN
Reply ZfeoztdAXRNYJH
2:40 PM on August 12, 2022 
jCxXEZOhoQBVyc