Want to know where your money has been, where it is going and what it’s been up to? It’s time to reconcile with it.
Or at least your bank statement.
All kidding aside, reconciling your bank statement is critical to your business. By definition, reconciling your bank statement means you are matching your business and banking activities with that of your bank account. Reconciling your bank statement ensures that:
- Payments have been processed
- Cash collections have been deposited
- Fees charged have been accounted for.
- Ensures that the bank statement matches internal records.
So, why reconcile?
- It is a “mini-audit” of sorts in that it shows where cash is going—or not—ensuring security of the account.
- Setting up an opportunity to create a financial strategy—you have a roadmap of cash flows in and out.
- Uncovers errors such as unrecorded transactions or transpositions of numbers.
- Doing it monthly keeps your company steering in a positive directions as you know your bank balances and internal books are correct and match one another.
Do you reconcile your accounts? Are you up to managing this process? If not, you should consider outsourcing your accounting needs to a third-party provider. TFO Solutions is just such a company.
For more on how to manage your finances, call or write to us. TFO Solutions is dedicated to helping entrepreneurs and business owners with their financial strategy from the back office to the boardroom.
*photos courtesy of Unsplash