Bank account reconciliation is an important part of maintaining accurate records for any business. However, for business owners, this particular task can feel tedious, especially when juggling other responsibilities. In today’s fast-paced world, not reconciling your bank accounts can open the door to costly mistakes and even a bad public image of your business. 

The reconciliation process is quite simple– you compare your company’s internal cash records with your bank statement to spot any discrepancies. But in reality, it can be time-consuming. This is where a CPA in Christiansburg, VA, becomes your business’s secret weapon. A financial expert who ensures your books are balanced is just what you need to grow your business. 

However, getting a CPA is not just about getting the numbers right. With their years of experience working in the field, they have a sharp eye for detail. They can spot potential financial risks early, which allows you time to correct issues before they escalate. Meanwhile, read this blog to know how you can easily reconcile your bank accounts. 

Step #1: Have your documents ready. 

Before you start reconciling your bank accounts, make sure you have all your documents with you and organized. This includes all your recent bank statements that contain your transactions for the specific period. Whether you use spreadsheets, ledgers, or financial software, ensure your internal records are ready.

It is crucial to verify your starting balance. Do not forget to double-check the starting balance, which should match the opening balance on your bank statement. 

Step #2: Match your bank statement with your records. 

Once you have gathered your documents, it is time to compare your bank statement with your internal financial records. To do that, you have to go through each transaction to ensure that the data between the two sets align. This is where discrepancies may start to appear, such as checks that haven’t cleared or payments that were not recorded.

Step #3: Resolve unmatched transactions. 

If you do find any discrepancies, the next step is to find the cause. Common reasons for mismatches include outstanding checks, unrecorded bank fees, or simple data entry errors. Resolve the issue once the root cause is found, be it adding missing transactions, adjusting amounts, or recording overlooked bank fees.

Step #4: Update your records. 

Once you have identified and solved the discrepancies in your records, it is important to update them properly. Make sure that you have made all the required changes and adjustments in the amounts. Once all the changes have been made, double-check the adjusted balance in your records to ensure it matches the ending balance on your bank statement. 

Step #5: Finalize the reconciliation. 

The last and final step is to complete the reconciliation. This includes matching the ending balances in your accounting records with the closing balance on the bank statement. If you spot any more discrepancies during this process, keep them noted. You would have to go through the previous steps again to find the errors and their potential causes. 

How do you reconcile your bank accounts without feeling confused?

Using the right tools can make the reconciliation process much easier. You can use software like QuickBooks, Xero, and FreshBooks as they have a user-friendly interface with good features. 

Business owners often find themselves confused during bank account reconciliation, which is understandable as this is not their area of expertise. While small business owners may be able to do it with no help, people with a larger organization may require professional assistance. 

Therefore, the best solution for a confusion-free reconciliation process is hiring a CPA with a reasonable amount of experience. 

Hire a CPA for peace of mind!

Being a business owner, you already have various duties and so little time. Instead of adding to your stress with new tasks, hire a CPA in Virginia today!