Balancing your business checking account can be a frustrating experience. You think you’ve done everything right, but when you compare your check register to your bank statement, the numbers don’t match. This can be a sign of a simple error, or it could be something more serious.
“One of the most common issues we see with our clients is that they don’t reconcile their bank statements regularly,” says Paul Yee, Co-Owner of NorthStar Bookkeeping. “This can lead to a number of problems, including missed payments, bounced checks, and even fraud.”
There are a number of reasons why your check register balance might not match your bank statement balance. Some of the most common reasons include:
- Outstanding checks: When you write a check, it may not clear your bank account immediately. This means that the check will not be reflected on your bank statement until it is processed by the payee’s bank.
- Deposits in transit: When you deposit a check, it may take a few days for the funds to become available in your account. This means that the deposit will not be reflected on your bank statement until it is processed by your bank.
- Bank errors: While rare, banks can make mistakes. For example, a bank may accidentally deposit funds into the wrong account or charge you an incorrect fee.
- Unauthorized transactions: If you see a transaction on your bank statement that you don’t recognize, it could be a sign of fraud. You should contact your bank immediately if you suspect that your account has been compromised.
“Another common issue is that people forget to record transactions in their check register,” says Heather Kirstein, Co-owner of NorthStar Bookkeeping. “This can make it very difficult to track your spending and reconcile your account.”
If you find that your check register balance does not match your bank statement balance, we recommend comparing your check register to your bank statement and identifying any discrepancies. Once you have identified the discrepancies, you can take steps to correct them.
How to Reconcile Your Bank Account
Reconciling your bank account can seem like a daunting task, but it is actually a fairly simple process. Here are the steps you need to follow:
- Gather your documents. You will need your check register, your bank statement, and any recent deposit slips or check stubs.
- Compare your check register to your bank statement. Look for any transactions that are on your bank statement but not in your check register, and vice versa.
- Identify any discrepancies. Once you have identified any discrepancies, you need to determine the cause. Are there any outstanding checks or deposits in transit? Did the bank make any errors? Are there any unauthorized transactions?
- Make any necessary corrections. If you find any errors in your check register, correct them. If there are any outstanding checks or deposits in transit, make a note of them. If you suspect any fraud, contact your bank immediately.
- Repeat this process monthly. It is important to reconcile your bank account on a monthly basis to ensure that your records are accurate and up-to-date.
“The most important thing is to be organized and systematic,” says Yee. “If you take the time to reconcile your account carefully, you can avoid a lot of problems down the road.”
How NorthStar Bookkeeping Can Help
If you are struggling to reconcile your bank account or you simply don’t have the time, NorthStar Bookkeeping can help. We offer a variety of bookkeeping services, including bank reconciliation, to help you keep your finances in order.
“We understand that bookkeeping can be a time-consuming and confusing process,” says Kirstein. “That’s why we offer a variety of services to help our clients with their bookkeeping needs.”
We can help you with all aspects of bank reconciliation, from gathering your documents to identifying discrepancies to making corrections. We can also help you set up a system to track your finances and ensure that your records are accurate and up-to-date.
NorthStar Bookkeeping serves businesses of all sizes in Orange County, CA, and across the United States. Contact us today to learn more about our bookkeeping services and how we can help you keep your finances in order.