Why is reconciling your bank account so important?

Why is reconciling your bank account so important?

To some this may appear as a silly question when most of us would say ‘of course I reconcile my bank account’ however, it’s surprising how many SME’s and freelancers don’t and then run into issues at the month or yearend when they hand their accounts over to their accountant or business advisor and wonder why they have so many questions about payments made out or going into their bank account that haven’t been processed in their accounts.

Why reconciling your bank account is important

Keeping track of expenditure and income is paramount for any business and reconciling your bank account with your accounting system is one of the first areas your accountant will check as your accounting system should be a mirror image of every transaction going into and coming out of your business bank account. Ideally this should be completed on a monthly basis especially if you are using the VAT Scheme Cash Accounting.

Importing your bank statement

Having the ability to import your bank statement into your accounting system can highlight any transaction that has yet to be entered giving you clear indication which entries still need to be processed. All online banking systems allow you to download your bank statement as a pdf or in a spreadsheet format and all cloud accounting systems have the functionality for either direct bank feeds or an importing facility. Once your bank statement is placed into your accounting system this functionality allows you to post direct from your bank statement ensuring that all transactions are accounted for so nothing is missed.

With cloud accounting systems your Accountant or Business Advisor can gain access to your system and check at a glance your bank reconciliation. With Reviso Cloud Accounting we have streamlined this process whereby you can give access enabling your Accountant or Bookkeeper to check your reconciliation, making sure all entries are present and correct in real-time, and online. This is not only a time saving function but allows you to feel confident that all entries are being accurately recorded.

This functionality is not limited to bank statements it can also be used to reconcile credit cards, by importing your credit card statement transactions can also be posted direct from the system saving you so much time.

Completing a bank reconciliation for the first time in Reviso and need help? check out our help section on importing your bank statement or you can register for a free, live and interactive training session or just get in touch with us at help@reviso.com and we will be happy to talk you through this.

 

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