How to do a bank reconciliation for your small business? (2)

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How to do a bank reconciliation for your small
business?
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How to do a bank reconciliation for your small
business?
1. Its important to keep track of your business
income and expenses, especially if youre
self-employed or have a small business with only
one or two employees.
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2. You can use accounting software to help you
with this task, but the process of doing a bank
reconciliation can be confusing, especially if
youve never done it before.
3. Dont worrywe have you covered! This guide
will walk you through everything you need to know
about bank reconciliation, including how they
work and what kinds of transactions make up your
financial statements.
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What is a bank reconciliation?
1. A bank reconciliation is the process of
matching the balances in your company's
accounting records with the corresponding
information from your bank statements.
2. This ensures that your books are accurate and
up-to-date. The process can be done manually or
with accounting software.
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Why you need to reconcile your accounts?
1. It's important to reconcile your accounts
regularly to ensure that your books are accurate
and up-to-date.
2. This process can also help you catch errors
and prevent fraud. Plus, it's a good way to keep
track of your spending and make sure that you're
not overspending.
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The first step in the process
1. Now that you have everything organized, it's
time to start reconciling.
2. You will want to compare the figures in your
checking account with the amounts on your bank
statement.
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3. If you're lucky, these two will match up
perfectly and all you'll need to do is make sure
the two agree on what each number stands for
(such as deposits and withdrawals).
4. If they don't match up at all or if one of
them is off by just a little bit, then we need to
delve deeper into what might be going wrong.
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A summary of key points
1. In order to reconcile your bank statement with
your own records, you need to have both in front
of you and compare the two.
2. Look for any discrepancies and try to figure
out why they exist. This could be due to an error
on your part, or something more sinister like
fraud.
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3. Once you have identified all the
discrepancies, make the necessary adjustments in
your records so that they match up with the bank
statement.
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