May 2021 – MYOB Tip
Reconciling your bank accounts is one of the most important bookkeeping tasks. Depending on the business it can be done daily, weekly, monthly or quarterly.
What is bank reconciliation and why is it important?
A bank reconciliation is the process of matching the transactions in your accounting software with the actual transactions in your bank account.
It allows you to check that all bank transactions have been entered into your software, ensuring your financial reports are an accurate reflection of your business. It also helps find data entry/payment errors that need to be corrected and verifies your cash flow.
How do I reconcile my accounts?
Depending on your software and whether you use bank feeds there are different procedures for reconciling your bank accounts. But the end result will always be the same, the Closing balance on your bank statement will match the Calculated balance in your software.
You can find step-by-step instructions for your software in these help articles:
What if my account doesn’t reconcile?
If your account doesn’t reconcile you need to find what is causing the out of balance and make the necessary changes.
Some of the common causes for an out of balance amount are:
- the wrong date has been entered
- the wrong balance on your statement has been entered
- not all bank transactions have been recorded in your software
- a transaction is selected that doesn’t appear on the bank statement
- a transaction amount has been recorded incorrectly, eg, $217.50 instead of $271.50
- a previously reconciled transaction has been deleted or changed in your software causing it to become unreconciled
To help you find the cause and correct any errors our help articles have detailed information on reconciling your bank accounts:
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