If you run or operate a small business, it is your sole responsibility to be financially healthy to operate.
To do that, certain bookkeeping and accounting activities must be performed – especially at month end.
From employee payroll, budgets, and expenses – your dollars in spending need to match what is in your books.
Your day may be uncontrollable with customers, orders, sales, and services needing your attention. Often times, business owners leave the books for “when they have time” or to someone they trust – usually a family member or dear friend.
Where this may work for you, you should be aware that errors do happen and when these errors occur, finding out months later can be a tricky web of columns, debits, and credits to unravel.
The last thing you need is to hire an accountant or CPA firm to “fix your books” and absorb the high dollar per hour cost.
How do you avoid this from happening?
When your business needs to document or verify account balances, this is referred to as reconcile accounting.
Reconcile accounting is figuring out how much money is sitting in your account. Sounds easy, right?
However, to accomplish this, you must keep track of records of every transaction that transpires. Depending on whether you run a cash basis or if you run an accounts receivable business, you are going to need some sort of documentation system.
You will need an invoicing system that matches with contracts or service agreements to reconcile and total your balances each month.
If you miss a step, this can alter the growth of your business for many different reasons.
The Magic of Reconciling Accounts At Month End In 8 Steps
In order to do this yourself, this is a general guideline that you can follow to assure you or your in-house bookkeeper is getting the job done correctly.
We implement this same strategy for our clients when we manage their books.
Reconciling your account is your testimony that these transactions are valid and belong in that account and not in some other account.
This is also a good practice to get to know the inner workings of what goes in and out of your business.
More importantly, you are testifying that you are running an honest and legitimate business and can keep you from any legal trouble.
Taking control of your finances is making good business decisions. Using outsourcing bookkeeping services like LUXA is a sound move to improve the financial outlook of any business.
With LUXA reconciling your accounts you can be assured that an experienced online bookkeeper is handling your books and this can improve your odds of profitability.
Additionally, we can custom design a program using your debits and credits to provide a viable solutions to keep your records accurate and become financially sound.
No matter what type of business you have, LUXA can partner with you as your outsource bookkeeper for your reconciling needs. Check out our pricing page to see what plan seems right for you. Have questions? We have an accountant ready to answer your no-obligation consultation.