Do I Really Have to Reconcile My Checking Account?
Question: I don’t like reconciling my checking account. Is there really a reason to do that?
Answer: Monthly reconciliations are a critical part of your accounting. I could argue that it is one of the most important steps to making sure your records are complete and correct.
Every month, you should reconcile each of your bank accounts and also each of your credit card accounts. Reconciling is a means of checking that your accounting records are accurate and complete. If you have neglected to record a transaction, deposit or withdrawal, it will appear on your bank statement, and you can adjust your financial records accordingly. It will also reveal bank errors should they occur and potentially uncover fraud within your company. Reconciliations will be one of the first things requested should you be audited.
QuickBooks has a reconciling feature in it that makes the process fairly simple. You don’t have to try to remember whether you add or subtract the missing items. QuickBooks does it for you. Any discrepancies will be immediately apparent, and you can make the adjustments as needed.
If your accounts are reconciled each month, you will know that all cash inflows and outflows, and credit card charges and payments are recorded in your accounting system. This will not assure that all transactions are in the correct accounts, but you can be sure that all of the dollar amounts are present and accounted for in your system.
Please email your questions to Harriet at Ask The Accountant.
QuickBooks Premier and Enterprise can be modified to better serve ad specialty distributors. Harriet Gatter is a QuickBooks ProAdvisor, a former accounting professor and a former ad specialty distributor. She advises ad specialty distributors to use QuickBooks Premier and Enterprise, often in conjunction with other industry-specific software, to manage the complexities of the ad specialty business, with the results being time saved, errors eliminated and an overall accurate accounting of your business. Contact her at firstname.lastname@example.org
Harriet Gatter, owner of Accounting Support LLC, was an ad specialty distributor for 23 years and an adjunct professor of accounting at Neumann University. She sold her ad specialty business in 2012, became certified as a QuickBooks ProAdvisor, and now works exclusively with ad specialty distributors nationwide on their QuickBooks, order management and accounting needs.