Owning a business requires setting up your bank account right from the start. A bank reconciliation process can help you spot accounting problems and even fraud. Bank reconciliations can help you take control of your business finances. And understand what’s happening in your account. In today’s blog, you will learn how a bookkeeper can help you with your bank reconciliation process. Let’s get started:
What is Bank Settlement?
Bank reconciliation is a process. The bookkeeper compares your business ledger information with the company’s bank account. This ensures that they both have the same information on any given day. If the information is exactly the same, it indicates that your bank account has been reconciled. Although reconciliation of bank accounts was a very time-consuming manual process. But with the invention of new software, bank reconciliation has become a much more efficient process. If you don’t know the bank reconciliation process, you can get Accounting and Bookkeeping services in Melbourne.
Purpose of Bank Reconciliation
There are many reasons to settle bank accounts every day. If you don’t follow this step, you will never know how much money your business has. Here are some reasons why you need to perform this procedure:
1. Find and remove errors.
If there are any errors in bookkeeping, these errors can be rectified using this process.
2. Detection of fraud and incorrect payments
When you audit your spending, it will be easier for you to identify fraud and suspicious activity.
3. Check business performance
Checking the numbers daily will help you see how you’re doing. And you will know the financial status of your business.
4. Get ready for tax season
To file a tax return, you must have a reconciled record of business expenses and income.
5. Track financial performance
To keep track of how much you earn and spend, you should have a complete history of your work.
How can a Bookkeeper help?
First, you need to keep one thing in mind: you must understand that bank reconciliations do not have to be done annually or quarterly. But you need to do this at least once a week, but professional companies like to set up bank accounts daily. A secret we would like to share with you if you have been waiting a long time to clear your bank account. This can lead to various errors. This can get you into trouble, which is why a Melbourne bookkeeper can help you through this complicated and time-consuming process. So you have time to focus on other business tasks.
Fetch your business and bank records:
You should get your bank statement at the time of settlement of your bank account.
Check your opening balance:
The bookkeeper will now check the posted balance on your bank statement with the posted balance shown in your account entries.
Review your transactions:
Next, you need to ensure that the transactions in your company’s accounting records match the transactions in your bank statements. If the bookkeeper notices any error in a transaction, he will investigate the issue and resolve it accordingly.
Check your balance at the end of the period:
After the bookkeeper settles all your financial transactions. The bookkeeper will check the final balance of your bank statement and re-register your account. If they don’t match, the bookkeeper will check the transaction again to see what went wrong.
If your business books are out of date, this can cause problems when filing your tax returns, but be sure to hire an accountant for your business. So he can take care of your business during tax season so you can search “Accountant Near Me” to find an accountant near you.
We would like to share a tip with you here. Make sure you use a separate bank account for your business, so you know that all financial transactions on your bank statements relate to your business. This should appear in your business account. If there is no sync, you need to find out why. If you keep your books and trading accounts, there’s a good chance you’ve written something down. If you use the same account for personal and business purposes, a missed transaction or incorrect information entered at the wrong time complicates bank account reconciliation. Hence, it is advisable to hire a bookkeeper to help you in this process.
Result
Your business book must be updated for proper bank reconciliation. Therefore, bookkeeping is essential for small businesses. So make sure you have a professional bookkeeper to take care of your business books. For professional bookkeeping services, you can contact Numbers Pro.
