Reconciliation is one of the most critical validation checks in business bookkeeping. It is the process of comparing the transactions recorded in your accounting software or ledgers against the transactions listed on your official bank and credit card statements. If the balances do not match, a reconciliation process is used to locate and correct the differences.
Common Discrepancies Reconciliation Uncovers
Even with automated transaction feeds, errors can slip into your business records. Regular reconciliation helps identify:
- Duplicate Entries: Sometimes card swipes or bank transfers sync twice, causing expenses to look larger than they actually are.
- Missing Transactions: If a paper check hasn't cleared, or a manual receipt was never entered, reconciliation highlights the mismatch.
- Unnoticed Bank Fees: Monthly account maintenance fees, wire fees, or merchant card processor deductions are easily overlooked unless cross-referenced.
- Recording Errors: Keying in the wrong digit (such as $150 instead of $105) creates a mismatch that reconciliation quickly flags.
How Often Should Reconciliations Occur?
For most small businesses, reconciliations should be completed monthly. Reviewing statements on a monthly cycle ensures that records are closed out systematically, keeping errors from compounding into prior quarters.
Our team at Arvex Financial Ledger LLC provides comprehensive reconciliation support services. We match your accounts systematically against statement PDFs or electronic feeds, compiling clear logs of any entries requiring your clarification.