Nothing is quite as cumbersome or annoying as taking the time to reconcile accounts. Reconciling your bank, credit card, and other types of balance sheet accounts is never fun, but it’s so important. Every wonder why?
Reconciling your books monthly ensures that all your revenues and expenses are recorded, and the data is validated. This data can be used to make informed business decisions which in turn sets you up for success. Even if your business only has a small number of transactions each month, you should still be actively reconciling accounts.
Why You Should Reconcile Accounts
Remember, a lost receipt is a lost deduction, and a lost deduction means more taxes you will be required to pay at the end of the year. When you reconcile your accounts, you are balancing your books to the balance on your statement. Of course, the proper classification of the ins and outs of these transactions is essential to ensure you are accurately reporting these revenues and expenses to the IRS. Furthermore, your CPA or tax preparer will love you for it because it assures them that they are assisting you in completing an accurate return which is supported by a solid set of financial statements.
Finally, reconciling your accounts forces you to monitor your accounts for fraudulent activity. If anyone is improperly accessing or spending funds or if funds are missing; you will discover it through the reconciliation process. Even some banks make errors! This is your opportunity to make sure your bank is taking care of your cash, and you can hold them accountable when you observe any missteps.
Are you looking for help with your small business financial management? Let Tentho focus on your books so that you can focus on succeeding. Contact us or schedule your free consultation to discover what we can do for your business. We are always happy to help!