Here are 5 reasons why reconciling in your QuickBooks is so important.
- Reconciling your bank account ensure that all your deposits and payments are accurately accounted for and match your bank statements. Even with the invention of bank downloads, you will still want to ensure you do the reconciliation to ensure nothing is missing or duplicated.
- Reconciling your credit card accounts in QuickBooks is important because you want to ensure that all of your charges and payments are accurately accounted for. Your payments to the credit card should show up in your credit card register as well as your various expenses that you charged on your card. Be sure to keep personal charges out of your business file. If you happened to make a personal charge on your business credit card, ensure you code it as an owner’s draw.
- Reconciling your bank loans ensures that the loan principal and interest are broken out properly with each payment and that your overall ending loan balance accurately matches your bank’s balance for your loan.
- Any vehicle or equipment loans from third party lenders should also be reconciled at a minimum of yearly to ensure that the proper accounting for the principal and loan interest has been handled.
- Reconciliation is a key process for month end, quarter end and especially year end to ensure that your accounts are accurately matching third party totals. If you were audited, this is what auditors would be looking for so you want to ensure you have the most accurate information for your own management processes as well as tax preparation.
You can find the reconciliation option in both your QuickBooks Online and QuickBooks desktop products. Check out this great video for assistance with reconciling.