Top Tips for Bank Reconciliation and Bookkeeping for Small Business

1
Top Tips for Bank Reconciliation and Bookkeeping
for Small Business
2
Top Tips for Bank Reconciliation and Bookkeeping
for Small Business
1. Bookkeeping and bank reconciliation are two of
the most important activities when it comes to
running a small business.
3
2. If you dont do these tasks correctly, you
could end up paying too much in taxes or
mismanaging your finances.
3. These two activities should be performed on a
regular basis preferably once per month so
its important to know exactly what you need to
look out for and what mistakes you need to avoid
at all costs.
4
4. Here are top tips for bank reconciliation and
bookkeeping for small business.
5
What does bank reconciliation mean?
1. Bank reconciliation, simply put, is an
accounting technique to ensure your business's
financial records are in line with your bank's.
6
2. This includes checking all transactions made
on your account (as well as any of your accounts)
to verify you were not charged additional fees or
that no fraudulent transactions took place.
7
3. Reconciling a bank statement is not a one-time
task it must be done each month when you receive
a statement from your bank, so it is critical to
have systems in place that make reconciliation
easier.
8
Step by step instructions for a typical bank
reconciliation
1. Gather your bank statements
2. Open your business checking account register
3. Make sure all transaction details are correct
(either by printing out your checks or making
sure they match with what's on your bank
statement)
9
4. Verify deposits against your deposit slips
5. Correct errors in your register, like double
charges
6. Compare deposit amounts to those on a bank
statement make any corrections
10
7. Compare balance shown on a bank statement to
that shown in a check register make any
corrections
8. Record payment of checks from a business
checking account
9. Add up all entries in check register
11
10. Write down total debits and credits
11. Subtract total debits from total credits
12. Enter difference as a credit
13. Summarize credit totals at bottom of page
12
14. Sign at bottom of page
15. File original copy
16. Keep one copy
17. Send one copy to IRS
18. Send one copy to accountant
13
19. Send two copies to bank
20. Put copies in three-ring binder
21. Store in fireproof safe
14
The benefits of completing your own
reconciliations regularly
1. If you have your own business, doing your own
bookkeeping can save you a lot of money.
15
2. You also get complete control over how you
manage your business finances and taxes, which is
important if you operate in a highly specialized
niche where non-accountants may not be up to
speed on reporting requirements or tax code
changes.
16
3. One downside? You might discover that
bookkeeping isnt as easy as it looks! It takes
time, patience and diligence to do it rightand
doing it wrong can land you in big trouble with
both your accountant and tax authorities.
17
Additional Considerations
1. If you handle bookkeeping tasks as part of
your job, here are some tips to help you stay
organized and make sure your clients get paid on
time.
18
2. If you're starting a new business or have one
that's small enough that accounting tasks fall to
you, here are some things to keep in mind.
3. You don't need an expensive accounting program
or extensive training to manage simple
bookkeeping duties, but it can be helpful if you
know a few tricks of the trade.
19
Contact us
Call 1300 049 534
Website https//reliablebookkeepingservices.com.a
u
Email enquiry_at_reliablebookkeepingservices.com.au