Bank reconciliation is a comparison of a company’s accounting records for its bank accounts and the bank’s updates to those accounts. It is an essential process for businesses to go through, but it can be lengthy and laborious. Here are some ideas and tactics mentioned by our Melbourne Bookkeeper to assist you to save time and improve the efficiency of this process.

  1. Information and Documentation

To begin, make sure you have all of the necessary information and documents. If you want to notice which pieces are missing, incorrect, or in the wrong location, you need as many pieces as possible, just like a jigsaw, so you can get a better overall image. Furthermore, our bookkeeping Melbourne professionals said that if some of the information has not been recorded before you begin the process, you will have to repeat it several times, increasing the time required.

As a result, you must get documentation from the proper individuals, if necessary. For example, some salespeople’s trip charges may be missing receipts, which must be located and recorded.

  1. Do Not Forget Till

According to our bookkeeper service provider tills are a part of the company’s finances, bank reconciliation will be significantly more difficult if they are not taken into consideration. A triple reconciliation using actual cash, a book balance, and the accounting balance on a regular basis is a good concept. You will have a lower risk of making a mistake this way.

  1. Reconcile in Sections

It is a good idea to start the bank reconciliation by looking at the previous month’s closing balance, and if required, even further back. This is important bookkeeping for small business if a transaction was accounted for at a time before the previous tally was completed. This way, if an issue is discovered, we would not have to go over everything item by item, instead, we will be able to check-in parts to see which month the disparity occurs.

  1. Analyse Discrepancies

An issue with bank reconciliation is frequently the result of typical errors.

Before you waste time Melbourne bookkeeper suggests going through the accounts item by item, trying to pinpoint the source of the difference by remembering this type of error, paying particular attention to the amount in question, and seeing whether it can be linked to another transaction. This will save you a lot of time and aggravation.

  1. Banks also can Make Mistakes

While this is not typical, it is possible that the bank made a mistake. They may debit an erroneous amount from our account or deposit an inaccurate payment if we have multiple accounts with the same bank, bookkeeping Melbourne professionals said that they may make a mistake when making a deduction or deposit, and so on. As a result, if you discover an error for which no explanation can be discovered or you are unsure, contact your bank.

  1. Reconciling Items, the Last Resort

Considering the discrepancy as a reconciling item and then forgetting about it appears to be a simple and appealing approach. However, the gap will remain, thus this is not a true solution. Bookkeeper service providers said that if they pile up too much, the bank reconciliation will lose its significance, the accounts will no longer reflect reality, and the resulting jumble will become increasingly difficult to sort out.

We must request account balances that we have not received, as well as invoices and receipts that have not arrived, in order to ensure that we have all of the information and documentation we require and that the books are up to date, as described above.

  1. Process Automation

As you probably already know, any paper-based administration takes longer and is more prone to errors than an automated version of the same work. The same may be said for the bank reconciliation process. There are tools suggested by bookkeeping for small business experts for automating this process, or at least a portion of it, in order to make it more efficient and manageable.

  1. Reconcile More Frequently

You can reconcile your bank statement as often as you like if you have online access to your account. Consider reconciling high-volume accounts once or twice a month.