Balancing your checking account registry and reconciling your record to match your bank statements are part of good financial management. Making sure all deductions and transactions are accounted for—with their proper amounts, dates, and listed purposes—and ascertaining that balance totals are accurate are important bookkeeping tasks. Correctly reconciled accounts give you an accurate snapshot of cash on hand and alert you to any unauthorized or fraudulent charges before it is too late. Reconciling your accounts also enables you to budget properly and forecast for the future with a clearer understanding of changes in your cash flow.
If you’re just getting around to the bookkeeping after months of putting it off, you may find that your receipts don’t all add up and that the checking account balance indicated on your bank statement does not align with your records or expectations. To get your accounts in order and clear up inconsistencies, consider some common problems and quick fixes to get back on track.
One of the most common reasons for account discrepancies, unrecorded transactions will throw off your amounts. Doing your bookkeeping frequently and on a consistent schedule cuts down on the chances of forgetting to enter a transaction. Authorizing automatic electronic payments for monthly services can be convenient, but if you don’t remember to account for those charges in your registry, your balance totals will be off every month and you could even become overdrawn without realizing it
Redundancy in your entries will give you erroneous totals. If you have more than one person managing the books, it is possible both people added a transaction without realizing it. Or, money for a client invoice may have inadvertently been entered twice: once upon completion of the work and again when the money was received.
Check cashing is quick and convenient, but you still need to allow some time for checks to clear. Traveling through the mail takes time, as does sorting and processing when the checks are received. Some larger transactions may take an additional few days for funds to clear, so when reconciling accounts, look for outstanding checks or checks that may still be in transit to account for the difference in balance totals.
Entering a credit or debit in the wrong column will throw off your balance. Double-check additions and subtractions. If there is a transaction in your records that is half the amount your balance total is off, there is a good chance you debited or credited incorrectly.
Data entry error is one of the most common reasons for inaccurate books. Transposed numbers and misplaced decimals can actually lead to very large computation errors. If your estimated checking account balance is dramatically different from the actual and it is not because of an unrecorded withdrawal, double-check each entry to make sure the numbers were entered properly.
One reason to reconcile your accounts often is so that you can become quickly aware of charges you hadn’t expected. Unanticipated bank fees or ATM withdrawal fees that you neglected to record can add up and can cause your estimated balance and the actual balance to be out of sync. Regular monthly reconciling can alert you to these fees, as well as unauthorized charges from other sources.
If you are having trouble reconciling accounts and are not sure why, some outside help may be needed to find the source of the error. If there are multiple errors—and they occur commonly—it may be time to reevaluate the bookkeeping system and replace with something that focuses on accuracy and security. Online accounting software for businesses offers affordable, professional-level bookkeeping features that reduce errors and streamline financial management. Using programs that integrate with each other means that data need only be entered one time and will be automatically updated and reflected across all channels. This greatly reduces the possibility of duplicate entries, calculation errors, and data entry mistakes.
Checkeeper makes balancing your checkbook and reconciling your accounts simple and accurate, as all checks created through Checkeeper are automatically stored in a secure, easily-searched registry. Since Checkeeper integrates with many accounting and payroll software services, checks you issue through Checkeeper can be automatically imported into your accounting records for real-time financial accuracy.