When was the last time your reconciled your accounts?
If you're staring at the screen with a blank face or reaching for that 'x' in the top corner, stop! Reconciling your accounts is a vital part of keeping your business finances organized and tracking your cash flow.
Here's how to reconcile your accounts and make it part of your regular bookkeeping routine.
What does it mean to reconcile your accounts?
Ever looked at QuickBooks, thought you had tons of money, and then logged into your bank accounts only to see... record scratch. Turns out, you didn't have as much money as you thought.
Even the most incredible bookkeeping software misses transactions sometimes. When that happens, the balances in your bank account and your accounting software won't match. In order to keep things organized and truly understand your cash flow, you have to regularly reconcile your accounts to make those numbers match up.
How to Reconcile Your Accounts
When done monthly in an accounting software, reconciling your accounts should only take minutes!
STEP 1: Review your bank account and accounting software.
Open both your bank account and your accounting software. I like to set them up side-by-side on my desktop so I can compare them easily.
STEP 2: Match your transactions.
Start at the beginning of the month, and match each transaction in one software to the other. You want to make sure the dates and amounts are the same across the board.
If you see a transaction in one software that isn't in the other, it's time to do some digging! You'll need to track down that transaction - where it's from, what you bought, when you made it - to account for that difference in funds.
STEP 3: Make sure the balances are the same.
If you’ve matched up all of the transactions, the balance in your bank account should match the balance in your accounting software. If it’s still off, you’ll need to do some digging to find the culprit! Make sure you reviewed each transaction in your bank account carefully.
STEP 4: Reconcile!
If you’re using an accounting software like QuickBooks, you’ll see a big green check mark letting you know your reconciliation is complete! This means you can trust the numbers and manage your cash flow with confidence.
Building a bookkeeping routine?
I'd love to help! In my course Be Your Own Bookkeeper, I line out the exact steps for managing and maximizing your business finances. Learn how to keep track of your money, plan for taxes with confidence, and pay yourself what you’re worth.
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