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- Reading Time: 4 Minutes
- Published: January 20, 2022
- Last Updated: February 14, 2025
Bank reconciliation is the process of taking the information from your business’s bank statement and matching it with the amounts shown on your records. The bank account reconciliation process can be done monthly, quarterly, or annually depending on how often you make deposits to your account. Bank reconciliations are necessary to ensure that none of your transactions have been missed or duplicated.
Why is Bank Reconciliation Important?
Reconciling your bank accounts is imperative for many organizations to protect against errors and identify discrepancies. A bank reconciliation compares the daybook balances and ledger records with the bank statement. This process brings order to your records, revealing mistakes and ensuring that your documents are accurate. Reconciliation has numerous benefits, which include: Protecting against loss of funds, detecting errors in transactions, identifying the source of differences in bank statements and verifying the accuracy of your records.
12 Ways to Save Time Reconciling Your Bank Accounts
Reconciling your bank statements is often a time-consuming task. There are many systems out there to help you make this process easier, but in some cases, it might be too cumbersome for some businesses. So, in this post, we share seven ways to help you save time while reconciling your accounts.
1. Seeking input from your team to have a better bank reconciliation
With the correct information on hand, it is possible to represent what is missing from a bank reconciliation. It is essential that notices are made soon after a recorded transaction. An additional reconciliation will need to be conducted if any transactions are missed. Hence, having all necessary documents logged beforehand allows you to quickly complete the bank reconciliation with minimal time requirements.
2. Plan Ahead
One of the most time-consuming parts of reconciling a bank account is balancing. Anytime you want to save time at the end of the month, it’s essential to plan. When reconciling your accounts, it is imperative to have your most recent statements in front of you so that you don’t have to do too much digging. Keep track of when your statement will be showing up in your email inbox and set reminders for yourself accordingly.
3. Set a process in place
When we say process, we mean setting a specific procedure that you will follow no matter what. For a more efficient reconciliation, it is good to know the last transactions of the previous month. Some mistakes can be found quickly with this method, instead of going through each transaction.
4.Use Templates and Forms
If you have a lot of transactions in your bank account, it may be hard to remember when you spent money on something. This can lead to wasteful spending and inaccurate records. To save time reconciling your bank account, save templates and forms so that you can use them for all of your transactions in the future.
5.Reconcile your POS
When reconciling your bank account, including the transactions on your point of sale system to streamline the process and triple check for errors. Failing to reconcile all transaction types could lead to missing out on cash inflow and outflow.
6.Refusing paper statements
One of the simplest ways to save time is to refuse paper statements. You might be surprised how much paper arrives in an envelope each month. By switching to electronic statements available in different formats, you can save a significant amount of time throughout the year.
7.Paying bills electronically
When your bills are automatically paid, you don’t have to worry about paying them. Chances are they’ll be paid on time, and you won’t forget to pay them. You can set up alerts for your online banking account so that if there’s any unusual activity, you’ll know about it right away.
8.Understand reasons for discrepancies
A discrepancy is an instance in which two transactions differ. To conduct a more efficient bank reconciliation, it is best to pay attention to the common errors. Understanding your discrepancies enables you to avoid such mistakes in future. Accurate reconciliation saves both time and headaches.
9.Cross-checking Bank Record
Your bank does not have to be right always, and they also make mistakes. In the case where you are unable to find any reasonable explanation for certain discrepancies, it is okay to consult your bank and cross-check the records.
10.Setting up automatic bill pay
Reconciling your bank account is a time-consuming task. If you have automatic bill pay set up, you don’t have to withdraw money from the bank to pay bills which saves a lot of time.
11.Bank feeds to accounting software
Accounting software with a bank feeds feature is a great option to help with bank reconciliation. This digital link ensures that bank transactions are automatically imported into your accounting software daily. Also, it eliminates manual mistakes to a large extent. Using accounting software that has features to ease your bank reconciliation is a great way to cut time and money spent on this process.
12.Consider Outsourcing
Reconciling your bank accounts is tedious and time-consuming. It’s also one of the least enjoyable things you have to do as a business owner, but it must be done. Even if you are on top of your accounting, this task will take up valuable time that could be spent working on other projects. So, what’s the best option? You can outsource bank reconciliation services or overall accounting services to fit your need. This definitely is affordable and an effective way of approaching your bank reconciliation process.
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