Bank reconciliation – Why you need it?
Basically bank reconciliation is the process of matching the transactions from your bank transactions with your business records or like, the incoming payments from customer match with the invoices which have been generated, and the outgoing payments match with your expenses you have made.
Why bank reconciliation?
Bank reconciliation plays a key role because of its number of reasons like preventing mistakes such as receipts recorded improperly, payments that were not entered and many other that could impact your monthly finances.Next major benefit from it is uncovering fraud like If your company credit card details have been stolen online and your provider doesn’t catch it,by doing bank reconciliation gives a chance of finding these cases makes much easier.Bank Reconciliation becomes a primary defense against fraud.
Saving Money– By Spending time in both of your incoming and outgoing payments every month, it’s much easier to catch those things you meant to cancel.
Preventing unexpected Payments– Suddenly notice an electronic payment has been done which you have not done by doing bank reconciliation of your accounts, you can catch these issues in time.
Cash flow Monitoring – For a small business there are a lot of extra capital which go around, so it’s important to stay on top of how what you have is being used and adjust as necessary. Growing a business with strong financial records can help you better interest from investors in the coming future.
How often should you do bank reconciliation?
It’s better to take time do your bank reconciliation on a regular basis.
once a month is a good time see bank reconciliation. This time frame is enough to ensure your accounts are accurate and have time to investigate fishy happened. But it’s unnecessary for spending time for bank reconciliation every week.
Bank reconciliation & Accounting software
If you’re looking out for an easier solution to get rid of manually entry of each payment in your bank statement and expenses, yes it exists. With the right accounting & invoicing software, it can be digitised and can be made done automatic.
Just you need to upload upload csv file of your bank statement to your accounting software and automatic bank reconciliation takes care of the rest of the things so you can sit back and relax and make your done quickly and efficiently.