Usually, the current balance in your bank does not agree to your QuickBooks balance(check register, because of timing differences i.e. checks or deposits from today and yesterday that have not been processed by the bank. Before we start, the most important take away is that bank reconciliations help prevent or detect fraud.

The benefits of a bank reconciliation are:

• They detect fraud and any cash manipulations.

• They provide you with your actual bank balance to understand your cashflow

• They ensure the accuracy of your financial data.

What is a bank reconciliation - Bank reconciliations help you identify fraudulent transactions or bank errors in your bank account. When the amounts in QuickBooks do not match the bank’s records, you should question this mismatch and its reason. Alternatively, if you do not monitor your bank account by reconciling it, the fraudulent transactions or bank errors will not be seen by you. A bank reconciliation is the process by which the bank account balance in QuickBooks is reconciled to the balance in the most recent bank statement. Any difference between the two figures needs to be compared, examined and, corrected if necessary.

Three Benefits to bank reconciliations with QuickBooks

• QuickBooks organizes your bank transactions for you, and makes bank reconciliations easy.

• QuickBooks can reduce the time to reconcile from hours to minutes

• With QuickBooks you can easily connects your bank to QB and set up rules to categorize transactions with payee names to ensure accuracy and consistency and best of all, save time.

Recommendations

• Either the bookkeeper or the owner should reconcile the bank statement. Its not difficult once you learn how to do it. If the bookkeeper prepares the reconciliation, then the owner should review the reconciliation. The owner should compare the information in the paper copy of the bank statement to the electronic bank statement available on your bank's website.

• Set up a process for your bookkeeper to reconcile the bank statement or for your to learn how to review and understand your bookkeeper’s bank reconciliation.

Reconciling your bank account with no errors in 10 minutes is a great start to running a business with correct and timely financial information . You don’t have to wait for the end of the month to reconcile your bank accounts, you can easily do it weekly or even daily.