Bank Reconciliation is Not That Scary! 5 Tips!
Bank reconciliation can be quite intimidating to small business owners like you. Even with QuickBooks Online, mistakes can be done and your bank reconciliation will be harder than it should be. That’s why I have outlined below 5 key things you should be doing to have a smooth bank reconciliation experience every time!
1. Just like your daily habits, check on your bank feeds on a daily basis
- update your quickbooks online bank feeds daily
- add transactions daily
- look at your transactions while they are still fresh on your mind
- look at the balance of your bank inside QBO and compare it with the balance appearing on your banking website, they should be the same at same point in time or near to each other in amount
- most importantly, make it part of your daily routine!
2. Use Bank Rules but do not auto-add, or use auto-add very carefully
- auto-add rules can easily mess up your books with duplicates and floating entries.
- bank rules when used correctly will save you time and still be able to review it before the entry gets added inside QBO
3. Use Correct Vendor names when categorizing your business expenses
- it can be tempting to just add your expenses without assigning the correct vendor name, this is a bad habit, vendor names will help you save time finding expenses that you will want to review later, it also helps organize expenses inside Vendor management module of QuickBooks Online
- expenses added without Vendor names will not be shown inside QuickBooks Online Vendor page – this is really inconvenient for you!
4. Always do a bank reconciliation on a monthly basis and use the statement given by your bank!
- it can be tempting to just add your expenses without assigning the correct vendor name, this is a bad habit, vendor names will help you save time finding expenses that you will want to review later, it also helps organize expenses inside Vendor management module of QuickBooks Online
- expenses added without Vendor names will not be shown inside QuickBooks Online Vendor page – this is really inconvenient for you!
5. Always make sure you include all your bank accounts, credit cards, and PayPal for your business
- bank reconciliation is a super-effective tool to check on the completeness, and accuracy of your records, it also acts as internal cash control.
- bank reconciliation is a process where all your cash in bank should be matched up to the records of your banks.
- missing entries, invalid amounts, duplicate entries, and many more may be missed if not all bank accounts are reconciled
- should your business uses petty cash, reconcile this too from time to time!
Bank reconciliation is challenging but can be a fun process if done right. Follow my Top 5 Tips above and you can be more ready to go! Use bank reconciliation as a tool to improve your books, not another source of your headache!
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