What Is Account Reconciliation?
Reconciliation is the process of comparing transactions and balances in your bookkeeping records with a bank, credit-card, or other applicable account statement for a defined period.
The objective is to account for differences and verify that the records reflect the statement activity appropriately—not simply to make two numbers appear equal.
It Can Identify Missing Transactions
A transaction may appear on a bank or credit-card statement without being properly recorded in the books. Reconciliation helps surface these differences so they can be investigated.
It Can Reveal Duplicate Activity
Duplicates can occur when an existing transaction is recorded again from a bank feed or when the same activity is entered through more than one workflow. Reconciliation can help identify activity that does not agree with the statement.
It Helps Find Incorrect Amounts or Dates
Transactions recorded with an incorrect amount or date can create reconciliation differences. Reviewing the statement against the books provides a structured way to locate those discrepancies.
It Makes Financial Reports More Useful
Reports such as the Profit and Loss and Balance Sheet depend on the underlying bookkeeping. When applicable accounts are reconciled and transactions are reviewed, business owners have a stronger foundation for interpreting their financial reports.
Why Checking the Online Bank Balance Isn't the Same Thing
The balance shown in online banking is a current bank balance. A formal reconciliation compares the bookkeeping records with a statement ending on a specific date and accounts for the transactions that make up the balance.
There can also be outstanding or uncleared activity in the books. For that reason, seeing the same balance on two screens at one moment does not replace completing a proper reconciliation.
How Often Should Accounts Be Reconciled?
For many small businesses, reconciling bank and credit-card accounts each month as statements become available creates a consistent rhythm. Other accounts may require a different review schedule depending on the business and the type of account.
Monthly reconciliation also makes discrepancies easier to investigate because the activity is relatively recent.
What Happens When Reconciliations Are Months Behind?
When several periods have not been reconciled, later discrepancies can be harder to trace. Cleanup or catch-up work may involve reviewing prior activity in sequence, determining the last reliable reconciliation, correcting bookkeeping issues where appropriate, and bringing the accounts forward.
Carlisle Bookkeeping currently offers qualifying businesses up to six months of eligible catch-up bookkeeping at no additional cost when they begin ongoing monthly bookkeeping services. Eligibility and scope are determined after reviewing the business's bookkeeping needs.
Learn about the Catch-Up Bookkeeping Offer →
Monthly Reconciliation Support
Carlisle Bookkeeping LLC provides monthly bookkeeping and reconciliations along with QuickBooks Online support, financial reporting, cleanup and catch-up bookkeeping, and additional bookkeeping services based on the selected service level.
Based in Irvine, California, Carlisle Bookkeeping serves small businesses throughout Southern California and can also provide bookkeeping services remotely.
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