The Small Business Guide to Account Reconciliation

Small business owners get busy and fall behind with maintaining accurate accounting records. But it’s critical that the closing amount in your bank account matches the closing balance on your account records. Account reconciliation allows you to catch errors in your journal entries and general ledger for small business. If they don’t match, then the account balance has to be modified. 

Reconciliation is something we do all the time when we make purchases and check our bank accounts for balance, comparing amounts to receipts and credit card statements. It’s basically proofreading for accounting. When you take the time to spot errors early on, you can avoid significant problems down the road.

Between incoming sales, purchasing goods and services, paying for wages and salaries and other business transactions, it can be a lot of work to track what’s coming in and what’s going out. But when it comes to your business, it’s important to stay on top of these tractions to avoid missed payments and reduce the risk of fraud and theft. 

Reconciliation should be documented in a report to verify a review has been done. A good internal control system verifies that transactions are recorded correctly for the right amount and purpose. This strengthens the process of matching source documents to the appropriate reporting tool and maintains consistency. All of this can be done with real-time reporting where all transactions are in automated, easy-to-read reports that can be accessed at any time.

Common mistakes happen when transactions are entered manually, leaving room for human error. An automated solution improves workflow processes, minimizes data manipulation, detects errors and identifies fraudulent transactions. It also gives you the opportunity to plan ahead and create a forecast to help grow your business. With our platform you can:

  • See when transactions move from pending to funded to settled;
  • Drill down to the detail of any transaction;
  • View approved, pending, voided and settled transactions;
  • Match key information with settlements; and 
  • Customize reports.

Real-time reporting is a full audit trail for internal and external analysis and makes tasks a lot easier. As a small business owner, you already have a lot on your plate. Let our team of experts help you find the best solution for reporting and reconciliation tools so you can build your business.

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The Small Business Guide to Account Reconciliation