Schedule the time to do it every week or even every day. And set up a system that makes it quick and easy to grab the records you need. After you’ve checked all the deposits and withdrawals, your business bank balance should match the totals in your business accounts. This will be the starting point for your next reconciliation. Each entry should match a withdrawal on your bank statement.
How to do bookkeeping
- If you run a current account and a credit card account, you’ll need both statements.
- Access Xero features for 30 days, then decide which plan best suits your business.
- That way you know all the transactions on your bank statement are business related, and should appear in your business accounts.
- This will be the starting point for your next reconciliation.
- No matter how you do bank reconciliation, you’ll come across mystery transactions from time to time.
It sounds mind-numbing and it can be if you’re doing it manually with paper bank statements. But there are clever ways to lighten the load. Most banks will send your transaction data directly to online accounting software. Then you have both sets of records on the same screen and you can run through them really fast. Smart software like Xero will even suggest matches, so all you need to do is click OK. Learn about the eight core bookkeeping accountant for small business jobs, from data entry to reporting and tax prep.
Bank statement shows something that’s not in your business books?
This is why you’re doing bank rec, and there’s often a straightforward explanation. Bank reconciliation is a way to double-check your bookkeeping. You do it by comparing your business accounts against your bank statements.
Bank reconciliation happens when you compare your record of sales and expenses against unearned revenue enables matching when buyers pay in advance the record your bank has. It’s how you verify your business accounting numbers. Whether you do it automatically or manually, you can get more in our guide on how to do bank reconciliation. It’s a good idea to use a dedicated bank account just for your business.
Accounting software
Both sets of records should agree with each other. Accounting software speeds up bank reconciliation by pulling transaction data directly from your free bank reconciliation template in excel bank through a secure online connection. That removes keystroke errors for a start. When you compare your record of transactions against your bank’s, you’re doing bank reconciliation. Your entries should match up with their records.
Download the guide on how to do bookkeeping
Fill out the form to receive the guide as a PDF. Xero does not provide accounting, tax, business or legal advice. This guide has been provided for information purposes only. You need a list of transactions from the bank.
That way you know all the transactions on your bank statement are business related, and should appear in your business accounts. The longer you go without doing it, the longer it will take to catch up. It won’t just be that you have more transactions to do, it will take longer per transaction because you’ll have a harder time recalling the details. If a transaction isn’t showing in your business books, it could be from a keystroke error when you entered a transaction. Or it could be a transaction that you forgot to enter.