“If my accounting software (i.e. QuickBooks Online) downloads/imports all my bank transactions straight from the bank, isn’t it a waste of time to reconcile bank accounts each month?”
The more we have performed these bank reconciliations for clients, the more we realize their utmost importance.
Listed below are some common issues and why it is important to perform monthly bank recs:
- Bank Errors (Duplicated Transactions)
- Helps Identify theft or fraudulent transactions
- Reporting Issues (Accounting software failed to import all income/expenses from bank)
- Data cannot be fully trusted, think about how many times the data has traded hands, increasing the opportunity for errors to occur. Remember the telephone game? At the very least, the transaction data has moved from:
Point of Sale ⇒ Credit Card Processor ⇒ Bank ⇒ Business Accounting Records
Always remember, Cash is King and should be tightly controlled!!!