Making sure your bank and credit card accounts are reconciled to the exact penny is crucial to making sure you have accurate financial reporting, as any double counted transactions, or missing transactions can throw off your numbers. One of the most common mistakes performing bank reconciliations will catch is the double counting of invoices or double counting of expenses. As alluded to earlier, it’s easy for a rookie or DIY bookkeeper to accidentally forget to match a deposit to its corresponding invoice, or forget to match a check to the corresponding bill before posting it (this is probably the number one mistake I see in clients’ books). When this happens, your Income Statement can be adversely impacted. However, if you perform bank reconciliations, you should be able to identify mistakes and correct them before they snowball into a much larger and more expensive problem.
If you make one resolution for yourself and your business this year, make your CPA happy and make it a priority to complete monthly reconciliations of all bank accounts. If your business is growing too rapidly (a good problem to have!) and you don’t have time to do it yourself, reach out to a professional
who can help outsource your accounting and bookkeeping function altogether.