What Reconciliation Actually Means

Reconciling your accounts means making sure what’s in your bookkeeping software matches what’s actually in your bank and credit card accounts. Every transaction that cleared your bank should be recorded in your books. If they don’t match, something’s wrong.

Maybe you forgot to record some expenses. Maybe you entered a deposit twice. Maybe there’s a bank fee you didn’t catch. Until you reconcile, you don’t really know how much money you have or whether your books are accurate.

Why People Get Behind

Most small business owners start out reconciling regularly, but then life gets busy. You miss a month. Then another. Pretty soon you’re six months behind and the thought of catching up feels overwhelming.

Or maybe you hired someone to do data entry, but they never learned how to actually reconcile accounts. They’re just entering transactions without checking if everything matches. That’s almost worse than not doing bookkeeping at all because now you think your books are right when they’re not.

How We Fix It

We start by pulling your bank and credit card statements for whatever time period needs reconciling. Then we go through transaction by transaction and match everything up. When we find discrepancies, we track them down.

Sometimes it’s simple; a transaction got entered in the wrong month. Sometimes it’s complicated; someone returned a deposit but it was recorded as a new expense. We’ve seen all kinds of weird situations.

For that contractor I mentioned? We found the $23,000 difference was actually three separate issues: a big deposit that got entered twice, a loan payment that was never recorded, and about $4,000 in small bank fees that had been ignored for months.

Common Reconciliation Mistakes We See in Town

Restaurants and retail shops that take credit cards often forget to account for the processing fees that get deducted before the money hits their account. The sale was $100, but only $97 hits the bank. Your books need to show that $3 fee as an expense.

Construction companies sometimes have checks that don’t clear for weeks or even months. If you’re not tracking outstanding checks properly, your reconciliation will never work.

How Often Should You Reconcile Your Bank and Credit Card Statements?

Monthly. Period. Some businesses do it weekly, which is even better if you have time. But monthly is the minimum if you want accurate books.

If you’re behind, we can get you caught up. Then we can either train you to do it yourself going forward or we can handle it monthly for you. Either way works.