September 6, 2024
Image from Wix.
Welcome to our Weekly Digest! 🚀
This week we continue our "How to:" series with How to: Bank Reconciliations!
Many small business owners handle their own finances, so let's see what Xero has to say about bank reconciliations and how to handle them!
"What is bank reconciliation?
When you compare your record of transactions against your bank’s, you’re doing bank reconciliation! Your entries should match up with their records.
Why is bank reconciliation important?
Bank reconciliation helps you find and fix data entry mistakes or missed transactions! It’s also good for detecting wrong payments or fraud.
As you run through the transactions, you can also assign them to the correct business account and flag tax deductible expenses for when you file a return.
How to do bank reconciliations!
Many people open their business ledger on one screen and a bank statement for the same period, then cross-reference. If you can’t find a match for a transaction, you need to figure out why and make adjustments so that both records mirror each other.
These days, many small business owners use accounting softwares like Xero. This helps speed up the process by pulling transaction data directly from your bank through a secure online connection!
The software then presents the transactions on a screen, asking you to verify them and assign each one to an account!"
Good luck with your reconciliations and let us know if you have any questions!
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