Do you do a monthly bank reconciliation? We are not talking about glancing at your account online for a few minutes but thoroughly going through your account each month.
Because your bank account isn’t always an accurate reflection of your actual cash position, especially if you’ve just sent out some large checks.
Making decisions based on your bank account alone can be risky, and potentially send you into the red.
Bank reconciliations give you a better understanding of your actual cash position. Doing this also gives you a chance to verify all checks and invoices are numbered and accounted for.
Do you have any check numbers or invoices that are missing? Take this opportunity to figure out why and record the missing transaction. Do the same with voided or deleted checks. If you make this a monthly habit, incidents will be fresher in your mind, then it will be next tax season.
If this sounds like the last thing you want to spend your time doing, then consider outsourcing this task to a bookkeeper or an accountant.
When was the last time you did a bank reconciliation?
Want more accounting tips and tricks or help in understanding your financials? Download our financial goal setting worksheet.