Various tasks and processes can be done to avoid fraudulent activities and errors in financial transactions. Bank reconciliation is one of the most used processes to detect fraud, save money, and ensure the accuracy of financial statements. The bank account reconciliation process is helpful in evaluating whether everything is going well in the company in terms of finances, and it can be done by comparing the record of financial statements in the business books with its bank statements. For reconciliation, your bookkeeper will be responsible because generally bookkeepers are assigned to manage reconciliation processes.
Basically, with the help of this process, businesses can easily identify fraud or discrepancies. Thus, professional and experienced bookkeepers conduct reconciliation processes to maintain error-free records, and they also make sure that every financial transaction is documented properly and accurately. To know more about the bank account reconciliation process, keep reading this blog:
Why Should You Hire a Bookkeeper for Bank Reconciliation?
Generally, reconciliation is the way to know whether your own internal reports match the bank statements or not. Various transactions are involved in reconciliation. If your accounting records are accurate only then they are useful. You must know that even a small mistake in financial records can make a huge difference. Thus, it is important to reconcile your bank accounts accurately, and if you don’t have enough time, then you can take help from a bookkeeper. The following are reasons to hire a Melbourne bookkeeper to reconcile your bank accounts:
Keeping Track of Cash Flow
When your bookkeeper reconciles accounts each month, then you can have a clear picture of the amount of cash that flows in and out of our accounts. As a part of this process, you can also reconcile your credit card receivables to ensure that everything is going well.
With the help of the reconciliation process, you can easily identify discrepancies. For instance, according to your internal ledger, you spent $10,000, but when you check your bank statements, then they say that you paid $500. This amount might be small for you, but if you make the same mistake again and again, then you may get into big trouble. If someone is making fraud, then with the help of reconciliation, you can soon identify fraud.
Managing Accounts Receivable and Payable
One of the common sources of reconciliation discrepancies is a cheque that didn’t clear because your account didn’t have sufficient funds. When bookkeepers of Melbourne check your accounts receivables, then these types of problems can be prevented.
When you compare your statement balance against your internal records, then you can confirm that vital financial transactions have posted to your bank account. If you forget that you still have an outstanding cheque, then you could overspend on an account when it posts finally.
Validate Data Entry
With the help of bank account reconciliation, you can easily identify any inconsistencies, such as wrong data entries, redundant or duplicate data entries, or wrong amounts entered.
Financial Statements Accuracy
It is rare when banks make mistakes. With the reconciliation process, you can check whether your financial statements match your bank statements. There are various bookkeepers in Melbourne, so you can take help from them to help you find out if there is any discrepancy. They can help you identify these types of issues before they create big trouble for you.
How Often Should You Conduct Bank Account Reconciliation?
Whenever you receive a statement from your bank, you can perform bank account reconciliation. However, it is often done at the end of the day by many business owners, but some prefer reconciling bank accounts on a monthly or weekly basis. Before your bookkeeper reconciles your bank accounts, it is necessary to have accurate financial transactions. If you have accurate financial transactions, then your tax accountant can easily prepare and lodge tax returns. You can opt for accounting services as well so that your accountant can help you in managing business accounts and pay tax returns.
Now you have an idea of why you need to reconcile your bank accounts. If you are running out of time, then you can hire a reliable bookkeeper for your business so you can focus on the rest of the business tasks. Accounting and bookkeeping services are important for businesses regardless of whether the business is small or big. To get bookkeeping solutions for your business, you can also contact Reliable Bookkeeping Services provider.