Bank reconciliation is an unavoidable part of the bookkeeping process. It is required to ensure the accuracy and up-to-date financial records of the business. Professionals rely on this process to make sure that all financial transactions are verified and accurate. Generally, business owners choose bookkeeper services in Melbourne to get their bank accounts reconciled properly. In today’s blog, we’ll discuss the importance of bank account reconciliation for every business along with how a bookkeeper can help you with this process. Let’s get started:
What is Bank Reconciliation?
Reconciling your bank accounts means comparing your bank records with your internal reports. With the help of this process, you will be able to know the cash flow of the business without any missing amount. The frequency of bank account reconciliation depends on the business size and how many financial transactions take place in a day. Melbourne bookkeepers can reconcile your bank accounts on your behalf.
How does a Bookkeeper in Melbourne Help You Reconcile Bank Accounts?
For various reasons, large and small businesses need to make a comparison between internal financial records and bank records. Take a look at the following section to know how a bookkeeper can help you with bank account reconciliation:
• Accurate View of Financial Transactions
Bank account reconciliation is the best method to determine a clear view of the financial transactions within the business. When the financial records have been matched, the business owner would have an idea of the available amount for investment. By choosing Melbourne bookkeeping services, you can be sure that your bank accounts are reconciled on time and properly. Since there is no error in the records, business owners can’t make miscalculations or financial mistakes. It is also important for tax reporting to avoid tax penalties from the ATO.
• Keep an Eye on Accounts Receivables Outstanding
If the business owners allow clients to pay for their products or services long after making the purchase, bank accounts reconciliation helps get the right amount of receivables. If the businesses allow to retain clients and offer them flexible payment options, then bookkeepers in Melbourne have to keep track of accounts receivables outstanding that happen through bank statements.
• Identify Fraudulent Activity
With the help of bank account reconciliation, fraudulent activities can be identified in the accounting books. Bookkeepers also check for missing deposits or incorrect amounts in the business books. Some vendors are involved in fraudulent activities wherein they may change the amount on the cheque they received from the bank so they can withdraw a higher amount. However, with bank account reconciliation, bookkeepers can identify the scam.
• Maintain Positive Cash Flow
When you choose bookkeeping for small businesses, you can rely on bookkeepers to look after the cash flow of your business. Since the bookkeepers maintain the cash flow of your business, they can manage a positive cash flow. If the business loses money, the bookkeeper will consider implementing cost-cutting measures to regain its profitability. They will also spot high revenue generation to improve the tasks that can generate high margins to increase income.
When you seek help from a bookkeeper to do bank account reconciliation on your behalf, then they can provide you with insights and reporting that your staff won’t be able to keep up with. When you have accurate financial records, then it will be easy for Melbourne accountants to prepare and lodge taxes on your behalf. Thus, seeking help from professional bookkeepers can help you get a clear picture of your financial affairs while saving you time.
How Often Should You Reconcile Your Bank Statements?
According to the Australian government, you should reconcile accounts daily. Furthermore, it is recommended to reconcile your bank accounts each time you get a bank statement. As a result, you can protect your business from fraudulent activities and errors in the accounts.
Business owners and professional bookkeepers understand the value of reconciling bank accounts. It is a method to keep the accounts updated and accurate through data entry validation. Therefore, it is important to know the process of bank reconciliation. To keep your business finances organised and on track, you can seek help from bookkeepers, and for this, you can also contact a Reliable Bookkeeping Services provider.