How to Reconcile Accounts
Written by Eddy Hood
As the owner of a small business, you are solely responsible for ensuring that all of your numbers are correct at the end of the day. From spending budgets to employee payroll, your business dollars must add up. With all of those moving parts contributing to your success, business accounting can be quite a daunting task, but that is what outsourced accounting services like those available from Ignite Spot are for! When your business needs to prove or document their account balance, this is known as reconcile accounting.
In simplest terms, reconciling your account is determining how much money your business has in general checking. To do this, it is important for your business to keep records of each and every transaction that occurs. Relevant documents like invoices or contracts are often necessary when it comes to reconciling your business accounts. As such, maintaining order of these pertinent business documents is of vital importance to the growth and development of your business.
How to Reconcile Accounts
The following steps should be taken when you reconcile your accounts for your small business:
- Get a copy of the current statement for the account in which you are reconciling. In most cases, this will be a bank statement or a credit card statement.
- Make sure that last month's ending balance in your accounting software shows as the beginning balance on your statement.
- Enter the ending balance from your statement into the corresponding field in your accounting software.
- Launch the reconciliation program. Mark all deposits, checks, and other transactions on your bank account as "entered" in your accounting software if they are already there. This is usually done by clicking a check mark box next to the transaction in your software.
- Add any new transactions from the statement that are not already in your accounting software.
- Review any transactions in your accounting software that are not yet on your statement. This would include undeposited payments, uncleared checks, etc. Make sure they are legitimate entries. If not, adjust or remove as needed.
- Ensure that your reconciled difference equals $0 in your accounting software. If it doesn't, you have missed transactions or made inappropriate entries and will need to review your transactions again.
- Once complete, click the "Reconcile" button in your accounting software, print out the reconciliation report, and attach it to your bank statement for filing.
If you want to take control of your small business, have your accounts reconciled by Ignite Spot. We offer online accounting and bookkeeping services that are designed to help your firm become financially sound and, most importantly, profitable! We will take all of your business debits and credits and design a solution that is right for you, all while ensuring that your account records are accurate. No matter what business goals you have, Ignite Spot is here to help with your reconcile accounting needs. Download our pricing sheet today or give us a call for more information.