As a solopreneur or small team, it’s easy to let your financial reconciliation get pushed to the back burner. Most of the people we work with have the mantra that as long as their account is in the green, their finances are in a good place. Repeat after us: “Just because my account is in the green doesn’t mean it’s reconciled.”

 

So how often should you reconcile your financial records? At least once per month. Although real-time reconciliation is preferred, we know that’s near impossible as a small business owner. That’s why we recommend scheduling 2 hours on your calendar at the end of each month to reconcile your books and add notes explaining what the purchase was for.

Why You Should Reconcile Monthly

  • Even in the world of electronic banking, errors happen all the time by both vendors and banking institutions.
  • You can catch errors quickly and likely avoid costly fixes.
  • You can understand the financial health of your company in real-time and be confident in your next purchase.
  • You can recall a recent expense a lot easier than something you bought six months ago.

What Risk Is Involved If You Don’t Reconcile Monthly?

Companies that don’t perform regular bank reconciliations risk being a victim to fraud and bank errors. If left unnoticed, this can lead to major cash flow issues down the road that can hurt your business operations and opportunities for growth. More so, business bank accounts don’t include the same legal protections as personal accounts, meaning tracking fraudulent usage is typically not done by financial institutions. The responsibility is the account holders, making reconciliation one of the most important processes for your business.

 

As a small business owner, you need to reconcile your finances monthly to ensure you understand the financial health of your company and catch any fraudulent charges.

With a team of expert bookkeepers on your side, you’ll never have to worry about the health of your business. With Grow Thrive Succeed, we help you organize your business finances so you don’t have to stress over the numbers and can focus on what you love.

Need help? Contact us!