Reconciling the bank is the key to making sure all data is captured for the purpose of having a set of good and accurate financials.
It ensures all bank transactions have been recognized in accounting and are recorded against the appropriate code/ name in your chart of accounts.
The reconciliation page/tab helps bookkeepers and owners track and code to the right account and highlights transactions that need further information.
Some software programs now automatically reconcile as it is coded, this still means you should take a quick look to make the system has not made a mistake.
Mistakes in banking occur sometimes when a duplicated transaction has been entered or an entry deleted.
Xero offers two sets of bank/Xero transaction screens so you can balance across. These may differ if items have been imported and not bank feed driven.
The bank tab will reconcile to your bank statement exactly.
The Xero account transactions screen is a statement of transactions in Xero.
Myob reconciliation needs an end bank statement balance giving you the option to tick off items and match the bank if you are doing a manual reconciliation, otherwise like Xero, Myob will display the balance and give you an insight to whether they match.
The bank statement is the king source document that accounts for the majority of all business movements, so it is vital not to miss balancing it.
The reconciliation process can be one the difficult areas of bookkeeping when the accounts don’t balance.
Finding the problem is a huge task and an experienced bookkeeping will know where and how to look for items that are causing the bank reconciliation to be out.
Call us to help if you are having trouble reconciling your bank.