Everything you need to know about reconciliations

1. Everything you need to know about reconciliations A reconciliation is a process of checking and verifying the accuracy of account balances. Basically, it's making sure that the numbers add up. Reconciliations are important because they ensure that your accounts are in balance and help you catch any errors. In this blog post, we'll explain what reconciliations are, why they're important, and how to perform them. We'll also provide some tips on avoiding common mistakes. So, if you're curious about reconciliations or want to learn how to do them properly, keep reading. • •

2. What is a reconciliation? Basically, reconciliations are the process of checking and verifying your bank's records against yours. The word "reconciliation" means to make consistent; in this case, it means making your accounting books consistent with your bank's records. This ensures that you record transactions accurately and helps you avoid common mistakes like miscategorizing transactions or miscalculating finances. To perform a reconciliation yourself, you can use special software (e.g., QuickBooks) or even use Excel templates (see our guides). However, we recommend using a dedicated app – it'll simplify the process and save you time. We created one specifically for our readers called Multi-Currency Compta . It comes with great features, including transaction imports from over 8,000 banks in 150 countries. Why you need to reconcile your accounts? A bit of balance In accounting, accuracy is everything. So it's important that you catch errors as early as possible. That's what reconciliations are for – they help you spot any discrepancies between your records and those of your bank. If a problem occurs, you'll have a head start fix it before it gets out of hand. And the earlier you detect an error, the smaller it'll be – so reconciling on a regular basis can save you a lot of time and hassle later on. Identity theft Money laundering is another reason why accurate record- keeping is crucial. As financial institutions must verify their clients' identities, they're especially sensitive to fraud. That's why most banks use special software that blocks any suspicious transactions. However, accounts are also flagged if they don't match your records – e.g., if your bank's records show a withdrawal you didn't make or an extra deposit you didn't make either. So, even though reconciliations can be time-consuming and tedious, they're necessary for maintaining good relationships with your financial institutions as well as protecting yourself from fraud and other dangers such as money laundering .

3. How often should you reconcile? Every two weeks Most people reconcile their expenses at least once a month—which is fine if you don't have many transactions to deal with (e.g., salaries). But larger companies need to reconcile their accounts more frequently – e.g., every two weeks or at the end of each month. Smaller companies might reconcile even more often. If you have a lot of transactions to deal with, keeping up with them can be time-consuming and stressful . So use software that'll automate the process for you if possible. That way, you'll save time and won't need to worry about missing any important entries. account reconciliation software • Love Save • • • • Log into join this discussion.