Bookkeeping is the foundation of any successful business, and when using QuickBooks Desktop or Online, it’s important to use the systems correctly. Whether handled by a full-time bookkeeper or a dedicated business owner, financial records must be accurate, organized, and compliant to ensure smooth operations. To review best practices that help keep your records neat and error-free, refer to The ABCs of QuickBooks.
B is for “Bank Reconciliation“
In the world of finance and accounting, accuracy is key. One of the most important tasks that help ensure your financial statements are precise is Bank Reconciliation.
At its core, bank reconciliation is the process of comparing the cash balance on your company’s books (Balance Sheet/General Ledger) with the cash balance shown on the bank statement. The goal is to identify and resolve any discrepancies between the two. This process helps ensure that your company’s records match up with the actual bank account, providing a clear picture of your finances.
Why is Bank Reconciliation Important?
- Spot Errors and Fraud
- Track Cash Flow Accurately
- Maintain Financial Integrity
- Prepare for Taxes
How Often Should You Complete a Bank Reconciliation
Ideally, bank reconciliation should be done monthly, shortly after you receive your bank statement. For business with a high volume of transactions, more frequent reconciliations might be necessary to maintain tight control over finances.
How to Perform Bank Reconciliation in QuickBooks Desktop & QuickBooks Online:
How to get to the Reconciliation module in QuickBooks Online:
- Go to the Gear Icon at the top right
- Select Reconcile
How to get to Reconciliation module in QuickBooks Desktop:
- Go to the Dropdown from the top menu “Banking:
- Select Reconcile
Next steps for both QuickBooks Online & Desktop
- Chose the Bank or Credit Card to Reconcile
- Make sure the Beginning Balance matches period is being used (Matching a Statement).
- Enter the Ending Balance for the period being used (Matching a Statement).
- Enter date for period being used.
- Click off each Deposit and Withdrawal that clears the statement being used for that period.
- Once the difference is zero, then hit reconcile now.
- Print for Records Reconciliation Report.
Bernstein Financial Services is a full-service accounting and tax firm that helps business owners meet their financial goals in their personal and professional lives. For personalized guidance, please schedule a consultation appointment with a Principal.