Creating and maintaining a business bank account can be a challenging task. However, the challenge can be eliminated with regular bank reconciliation. Businesses usually have several bank accounts for different purposes. Therefore, keeping track of all transactions made from each bank account becomes important. Businesses can use bank reconciliation software to reconcile business financial transactions, balance sheets, cash flows, and other information from different banks so that everything is accurate and complete. As per a recent discussion with a senior executive of Whiz Consulting, “Bank account reconciliation is an essential process that every business must implement to ensure accuracy in financial records and reduce the risk of fraud.” Whiz Consulting is an outsourcing company specializing in accounting and bookkeeping. It is well-known to offer top-quality services to different businesses from various industries. Let us know what Whiz Consulting says about the importance of bank account reconciliation.


What is bank account reconciliation?

Bank account reconciliation is the process of reviewing a company’s bank account balance to ensure it matches the company’s books of account. Reconciliation is often used to see if the books match the cash in the bank or to compare the balance reported to the IRS with the balance shown on the books. Having a bank account is an essential part of running your small business. Even if you don’t plan on keeping money in your bank account, having one can help keep your books organized and transparent. In the words of Whiz Consulting’s senior officials, “Keeping track of cash and deposits, as well as disbursements and withdrawals, is key to maintaining a healthy business.”



Why is bank account reconciliation important?

The main reason to perform bank account reconciliation is to ensure that your books match your bank account and rectify any discrepancies. If you discover a discrepancy in your books or the bank account, you need to resolve it as soon as possible to continue operating your business. It is also important to reconcile your books because the law requires it. The IRS requires you to keep accurate books and records, and they want to make sure they have the correct amount of cash on hand to pay out taxes.



Ways to perform bank account reconciliation

These are the most common methods of bank account reconciliation: -

Reviewing the daily deposit and withdrawal entries - The account reconciliation process typically starts with reviewing the daily deposit and withdrawal entries. Every time you make a deposit or make a withdrawal, write it down in a journal so you can easily track it.



Reviewing bank statements - After reviewing the daily deposit and withdrawal entries, you should look at your bank statements to see if they match your books. Your bank statement should include an “Outgoing Transactions” section that summarizes your daily transactions. It should also show a balance at the end of each day.



Questioning bank employees - When performing bank account reconciliation, you can speak with bank employees to confirm details, such as the address where you conduct business and the nature of your business. You can also ask to see bank records and other supporting documents.



How accurate is a bank balance report?

The accuracy of the balance shown in a bank statement depends on the accuracy of the books that support the statement. When performing the bank account reconciliation, it is important to diligently compare the balance shown in the book with the balance shown on the bank statement so that you don’t miss anything. To determine the accuracy of the balance shown in your bank statement, you will first want to compare your books to the account. Then, you can look at the “Outgoing Transactions” section of the statement to see if the balance reported is close to the balance shown in the books. If it is off, you must look at other supporting documentation, such as canceled checks or other documentation.



Conclusion

Bank account reconciliation is essential to running a business, and it is important to have a bank account and perform bank account reconciliation properly. Reconciliation requires complete attention and time to ensure everything is reviewed properly, and you can choose an outsourcing service provider to conduct this process to save time and resources. Whiz Consulting is a renowned accounting and bookkeeping services provider that helps businesses manage various business processes, including bank account reconciliation. It has skilled and experienced personnel with up-to-date knowledge about various businesses and industries to help them manage its functions and focus on business growth.
https://www.whizconsulting.net/us/services/accounts-reconciliation-services/