- Small business bank reconciliation provides critical benefits besides just accurate bookkeeping.
- Checking bank statements can reveal internal and external errors.
- Account reconciliation is an essential step in detecting fraud.
- You also need to ensure that your ledgers reflect banking fees.
- SyncLedgers helps you enjoy all of these benefits while still having time for what you love about your work.
Many of us learned how to balance our checkbooks when we were young, and our parents helped us sign up for our first bank account. We remember how exciting it was to be able to spend money the way they did, by writing out a check. Those days seem so long ago now, as everything seems to have gone digital and mobile. But the need to balance our own records against the bank’s statements remains. Small business bank reconciliation requires much of the same process of comparison, but there are additional important benefits that companies get by doing it.
Why is Small Business Bank Reconciliation So Important?
Small business bank reconciliation represents a business application of one of the most basic accounting practices.
At the end of the day, the purpose of accounting is to report that all of an organization’s assets and claims are in balance. That includes all cash accounts, all outstanding debts and payments, everything.
Bank reconciliations are one of the essential processes that help stakeholders to verify that balance. A good comparison would be to say that it’s like a more consequential version of the kind of checkbook balancing we learned from our parents and mentors.
It’s also about more than just confirming that everything is correct between the ledgers and the bank statements. That correctness brings additional benefits.
Ensure Accurate Bookkeeping
The first and most obvious benefit of small business bank reconciliation is that it’s a simple way to check how accurate your bookkeeping system is.
If it’s accurate, the bank’s record of your transactions acts as a sort of second witness to your business activity. It may not reflect every single ledger entry. It will provide an at-a-glance view of the transactions that most affect your business, though.
You can compare this view with the ledgers and see whether the amounts coincide. Errors will occasionally appear, but if they’re frequent, that’s a sign that something is amiss. You may need to switch financial institutions. Your bookkeeping team might need a change. Just make sure they have all the tools they need before you reach for the pink slips.
This almost goes without saying. Reviewing your bank statements is a critically important way to make sure that you’re only paying for what you get. You want to ensure that no one’s trying to pull a fast one on you.
Aside from cases where one of these malicious events draws down your balance so much that it prevents further transactions, you may not be aware of them until you review your statement.
It’s important to address fraudulent charges as soon as possible. The sooner you catch them, the easier it is to track down the cause, and if possible, to seek justice.
Check your statements often!
Stay on Top of Costs
If you’ve ever had a bank account for longer than a month, you’ll have already noticed that your balance isn’t always what you expect.
Most banks still charge monthly fees in exchange for holding onto your money, or to cover transaction costs.
These fees may be periodic, or they may appear when you aren’t expecting them. If they’re part of your contract, you’ll need to account for them at the end of the reporting period.
Simplifying Small Business Bank Reconciliation with SyncLedgers
Naturally, small business bank reconciliation is one of the normal features of the bookkeeping services we provide at SyncLedgers.
You most likely don’t really enjoy comparing sets of numbers to each other. Even if you do, we know how busy you are as a business owner. You don’t have time for everything, so that’s why we do it for you.
Contact us today to reclaim the time you need for growing and enjoying your business. We’ll handle the balancing act!