Keeping a business’s accounting up to date is no small matter. Because of that, we’ve compiled a list of the five best local bookkeeping reconciliation practices. Account reconciliation is an essential part of any bookkeeping effort, so it’s important to get it right. Doing so helps companies and owners to avoid letting errors compound and create terrible problems with auditors down the road!
1: Prioritization of High-Risk Accounts
Some bookkeeping accounts by nature are more likely to have errors than others. The most obvious are the ones that depend primarily on manual data entry, rather than automated inventory and billing systems. And even the ones that are automated still have to be manually programmed in the first place.
Wherever computers do most of the work, or where amounts are often small or relatively inconsequential, your bookkeepers can afford to focus their attention elsewhere, most of the time. That doesn’t ever mean completely ignoring any accounts. On the contrary, everything needs to be reviewed. The key best practice, however, is for staff members to focus their efforts where they’re most likely to find discrepancies.
2: Striving for Completion and Accuracy in Context
This may come as a shock, but it’s not always important for accounts to match to the penny.
It’s always worthwhile to try at least once to find the source of tiny mismatches, but if hours and days go by with no resolution, that effort is incurring far greater costs than it could ever hope to save. It’s impossible for any organization’s finances to be in a totally perfect condition all the time.
The best practice attached to this problem is for your organization to set acceptable thresholds for small discrepancies, and reasonable amounts of time to spend looking for them when higher-priority accounts are in order.
3: Implementation of Company-wide Standards
Each department in a company has its own goals and priorities in helping move the organization forward, but that does not mean that they should ever rely on different bookkeeping systems.
For local bookkeeping reconciliation practices to provide a complete and accurate picture of a company’s financial status, it’s essential that every department adhere to the same methodologies and practices. Everyone should be submitting their expenses and invoices to the bookkeeping department on the same schedule, so that reconciliations and other processes can always occur at regular intervals.
Organizations should establish standard policies, procedures, and templates for every team member to use consistently, so that there’s no confusion about the meaning of any documents or data.
4: Use Technology Tools to Enable Strict Adherence to Accounting Principles
A key part of an accounting best practices strategy, whether enacted by a business in-house, or through a local bookkeeping provider, is a unified array of technology tools. It does not necessarily matter which of all the available software accounting tools your organization decides on. Some may be better for a particular situation than others, but what matters most is that the whole company be on the same page.
Ensure that all departments have the same version of the same software installed, and that they are all connected to the same network accounts for easy reconciliation.
5: Monitor, Review, Adapt, Improve
It’s a really good idea to track more than just the raw ledger data. Bookkeeping processes can be rapidly streamlined when companies also make note of when the data is input, and by whom. Armed with that information, it’s much easier to identify both sources of errors and processes that often yield high accuracy and efficiency.
By acting on the implications of this data, companies can derive even better best practices on an ongoing basis, resulting in more accurate bookkeeping over time.
Get the Best Local Bookkeeping Reconciliation Practices with SyncLedgers
Some of the common factors between each of these best practices are that they all require careful attention to detail, and a willingness to be curious about the status of the organization’s finances. Complacency will never cut it! Keep in mind, though, that any company can implement all of the best local bookkeeping reconciliation practices. They are equally applicable for both internal accounting departments and external providers of bookkeeping services. As one such external provider, SyncLedgers works hard to ensure that we follow all of these practices for every client.
Be sure to contact SyncLedgers today for top-notch local bookkeeping services in Utah’s Wasatch Front region!