Reconcile Your Accounts—On Time, Every Time

by | Oct 12, 2017

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Last time, we focused on six good habits every small business owner should adopt for the good of their company. In the next few posts, we’ll dig deeper into each of those habits, one by one, to paint a clearer picture on how incorporating these practices can help boost your financial management.

There’s one number most businesses have a firm grip on: their checking account balance. In truth, the size of this number is how many gauge the health of their operation. If it’s big, they’re happy; if it’s small, they get nervous. There are two main issues with this notion. One, the number by itself is meaningless. You must bring in other figures (bills, invoices, credit statements, receivables and the like) to paint the clear picture necessary to run your business. Two, bank reconciliation often becomes the first task to fall by the wayside when business gets busy, when it should be the last. Skipping one month of reconciliation is dangerous because it leads to skipping to two, then three, and leading to a daunting tangle of numbers requiring time to sort out—and that’s wasting time you need to grow your business. What if you have  erroneous, duplicate or missing transactions in your financial management software? What if you sent an electronic payment that didn’t go through? You can’t know, unless you regularly reconcile your accounts with your records.

Making the vital vow to yourself to reconcile accounts every time is an important step. Another is communicating consistently with whomever handles your money. While you might know what financial resources you need day to day, your accountant (or other responsible staffer) offers a keener, more detailed perspective on your accounts so you can plan ahead and make more empowered financial decisions.

Once you have the people in place, get the proper tools. Accounting software like QuickBooks is helpful for small- to mid-size businesses because it facilitates and simplifies financial management, allowing managers to centralize their money data. This software saves time by automating many tasks, putting crucial data at your fingertips, enabling quick generating of profit-and-loss statements or other helpful reports, and streamlining AP and AR. If you decide to enlist the help of a manager or bookkeeper, make sure to meet at least once a month with this person, to improve your understanding of the state of your business. Take into account that we all have different emotions/thoughts/feelings about money. An important benefit of consulting with someone who has an unbiased relationship with your money can help you make smart decisions that are based on actual income, expenses and liabilities—not how you’re feeling at any given moment.

It’s easy in this digital age to assume banking has advanced far enough to make errors obsolete. In fact, technology just makes it easier to spot errors we likely missed in the past. Diligent reconciliation of your accounts enables you to avoid all-too-common errors (money deposited into the wrong account, accidental double payments) before they become costly and hard-to-correct problems, such as bounced checks.

Reconciling your statements isn’t just good for the here and now of your operation. Current, accurate financial statements make it possible for you to borrow money, drum up additional capital, and make other decisions necessary to grow your business. Contact me at Daliah@MySmallBusinessPro.com and I can help you get the ball rolling.

MEET THE TEAM: Milen Gomez, Staff ACCOUNTANT

6 months ago, we added a new staff accountant to our team: Milen Gomez. Our newest staff accountant is the best we could ask for with her incredible attention to detail and efficient mindset. She has been an essential part of our continued growth by always putting her...

Client Spotlight: Danielle Suchala Klausing

It’s always an exciting time when you’re ready to take the next step in life and buy a home. But finding that perfect home can be a challenge, especially if you’re not familiar with the real estate industry. That’s where Danielle comes in. With over 7 years of...

Who is responsible for payroll?

One of the most expensive resources for any business is payroll. It’s also one of the most important. We are firm believers that people are your most valuable asset, so it’s no wonder that payroll gets costly. Especially if you are a professional services company, and...

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Ahhh the joys of being a business owner. You get to set your own schedule, be in complete control of your success and of course, deduct your business expenses.   Just like all of those statements, there are some pros, cons and a lot of misconceptions that go...

How to beat tax stress

It's March and that means two things:   Tax season is in full swing.   Chicago winter is about halfway over.   There isn‘t much a financial consultant can do when it comes to the weather, but when it comes to making your tax season less...

Meet the team: Eileen Manaloto, Sr. Accountant

Despite a job market full of unique challenges, My Small Business Pro was incredibly fortunate to bring on a new team member last year, Eileen Manaloto. Like many small businesses, we got creative in finding the right resource to support our amazing clients and fit...

Back to the Financial Future! 

A new year is upon us! While there’s a tendency to charge into 2022 with new hopes, plans and goals; but you need to pump the brakes. One of the most prudent things you can do is slow down and take some time to do a serious review of your past. Last year is full of...

Why Your Accountant Hates You

Unless prompted, few business owners willingly gush about their accountants. I get it, accountants aren’t always the most affectionate bunch; sometimes referred to as boring or dry. Many consider them a necessary evil, number crunchers or even bean counters. Some...

Sharpen your Tax Ax

As the year winds down, most people start to slow down. People are looking forward to the holidays and start to bundle up as the days get shorter, maybe even start planning that holiday vacation. But if you’re a business owner, there’s something that starts to scare...

What solution can Fritz Financial find for you?

Schedule a meeting with Daliah Fritz