Why you should reconcile your accounts....seriously!

Kylie Short from Tilda Virtual specialises in providing administrative support, bookkeeping, online marketing, e-newsletter design, website design and technical support. She is passionate about good book keeping and has provided this great article about reconciling your books that applies equally to business as it does to the volunteer treasurer in a community organisation.

"It’s an issue I come a cross often, incorrect or no reconcilation of accounts and it still amazes me to see it. I can’t imagine not reconciling the accounts and don’t understand why people are so laid back about doing it. Reconciling your accounts are important for a number of reasons:

• It picks up any missing transactions that you may have misplaced a receipt for;
• It picks up any transactions that should not have gone through your bank account;
• It picks up over payments to suppliers;
• It picks up over payments by customers;
• It’s good business practice to do it.

When reconciling your accounts under no circumstances do you ‘make up’ transactions just to make it balance. If the accounts don’t reconcile after you’ve ticked the statement and ticked the transactions in your software, then you need to start again from the beginning to find the mistake. One trick I have is to reconcile the bank statement on a page by page basis. Try reconciling the first page, if it balances then mark it reconciled and move onto the next page. Going page by page is a great way to find the mistake and you’ll soon have it finished.

After you have reconciled your bank accounts mark the statement as reconciled and file it so you can find it later. If you are ever audited you’ll need your bank statements and it can get quite costly to replace them. I personally don’t print all the reconciliation reports but it’s a good idea to print them to PDF and file them on your computer so you can find them later.

If the idea of reconciling your accounts gives you the chills or makes you want to head for the hills, give me a call on 03 9013 8389. My team and I would love to help you!"

If you operate a home-based business, Kylie Short can help you become more successful through her virtual assistance business, Tilda Virtual Services.