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Most common and biggest headache for owners is finding out that the bank records of the business does not match with the fiscal records of the company. You will be left wondering what went wrong, where did the money go. Worst you may even be charging the bank for getting money from your business account.
This is basically why business owners must conduct bank and account reconciliation regularly. Account reconciliation consists checking of both the financial records of the company and its bank statements to see to it that they concur with each other.
Accurately done account reconciliation would normally reveal records whether the money that comes in the business was indeed deposited in the bank on such date and time as reported in the financial statement. This will also shows if the money was withdrawn from business account while the company’s reports would show where the withdrawn money used for.
Monthly account reconciliation is very important in business management so that the company can identify accounting blunders early on such as recording of transactions, miscalculations or miscomputations and the like. This way the owners or managers will have the opportunity to correct the errors early and set forth measures to prevent from committing the same mistakes again.
Lastly, account reconciliation will help you be aware if you still have enough funds in the bank to cover unpaid bills. For instance, you have issued several checks to your supply providers for payment of the goods you ordered. Now, it could be that you have enough funds for the check when you issues them however you cannot be sure if you still have adequate funds to make good of the checks say 2 or 3 months from their issuance. And worst is, you totally forgot about the check. But if you have regular account reconciliation you can easily detect that your bank funds will not be sufficient enough to cover the checks you have previously issued. Thus, to ensure payment of the said checks you can make solutions by funding the same either transferring personal money to your business account or reinforcing collections. Either way you can avoid the embarrassment much more possible legal concerns.
One good thing on conducting regular account reconciliation is you will be able to find out if the bank is surreptitiously collecting hidden charges and expenses. If they actually do, you can ask the bank to remove the same. Some banks waive charges for valued clients. If however they refuse, go and look for another financial institution that can offer you same services at a lesser rate.
Here at SCP, we will do this for you!
Our team of experts and professionals are always ready to assist you with several accounting functions from recording transactions, keeping and maintaining books of accounts to preparing necessary financial reports. We provide wide range of accounting services including, payroll processing, bank and account reconciliation, financial statement preparation, outsourced accounting, accounts receivable and payable processing. This will enable you to focus on the core business competencies.
We establish and provide systems that will ensure timely and reliable financial information for appropriate business decision making of the management.
Further we likewise provide competent personnel on a temporary basis to assist clients where internal manpower is not adequate to complete accounting tasks.
Contact us for more information on how we can be of help to you.