One of the most critical accounting tasks for maintaining accurate financial records is reconciling your accounts. QuickBooks® Online makes the reconciliation process user-friendly. However, the process still requires attention to detail and consistency to ensure accurate results.
You must reconcile accounts for several important factors that affect both the day-to-day and overall financial health of your company. Accounts need to be reconciled for accuracy so you can confirm that your financial reports reflect reality. The reconciliation process also helps prevent fraud by detecting unauthorized transactions. Clean records assist in tax preparation, making filing smoother and less stressful. Finally, reconciling accounts gives a clear picture of your available funds, allowing for better cash flow management.
Step-by-Step Process
- Link Accounts to QuickBooks® Online
- Gather your bank statements
- Begin Reconciliation
- Input information from bank statements on the screen
- Match Transactions between QuickBooks® and your bank statements
- Investigate any issues
- Complete Reconciliation
Follow these best practices to ensure your reconciliations add value to your company:
- Completing a reconciliation each month ensures accounts are current and accurate.
- Be on the lookout for transactions that haven’t been cleared from a statement in over 30 days, as this will help identify errors or duplicate entries.
- Never force a reconciliation. Avoid adding manual journal entries or adjustments to get the reconciliation difference to zero. By doing so, you will hide real issues that will become a problem in the future.
- Make sure to use Bank Rules carefully. While they do save time, they can also cause incorrect categorizations if not reviewed regularly.
- After reconciling, close the books in QuickBooks® to prevent accidental changes to past transactions.
Reconciling in QuickBooks® Online is a crucial step in maintaining your business’s financial health. Done correctly, you will have confidence in your numbers, you can detect problems sooner, and by completing reconciliations you will ensure you are ready to file your tax return.
Reach Out to Learn More
In addition to completing monthly reconciliations, there are other monthly tasks that will help business owners identify areas to improve throughout the year. H2R CPA offers Outsourced Accounting Services to take this responsibility off your hands and give you confidence in your financials. H2R can be a trusted partner in your business by fulfilling this essential role. Our team will analyze your monthly activity, assist in financial statement preparation, and work with you to customize reports that will help guide your business throughout the year. All of this work is provided at a fraction of the cost of hiring a full-time Controller. If you are ready to build a more resilient business through a greater understanding of your financials and better preparation for year end, reach out to the Outsourced Accounting Services team at H2R CPA.
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