It is critical to reconcile your accounts monthly through the aid of financial software readily available in the market. Timely reconciliation is essential aimed at ensuring transactions are entered correctly. Aforementioned ascertains that; errors made during data entry into the software are captured, catch fraudulent activities, avoid preventable problems (bouncing checks and penalties for bounced checks), easy following up transactions, aids in identifying performance position of the firm and preventing losses. Therefore timely reconciliation ensure that your bank records are up to date and correct
Through the reconciliation endeavor, several problems are uncovered. They may include either bank’s computerization erroneous deeds or the human error. Identification of uncashed checks through mails perhaps misplaced within mails is uncovered. Through the help of the internal audit, uncovering of fraudulent activities is identified on time. Also, a problem that may be discovered is if the firm is underperforming, therefore, the monthly reconciliation functions as the unofficial financial review. Bank’s computerized errors include improper credit portioning, overcharged rates and glitches affecting checks are likely to be identified.
It is good accounting practice to track and reconcile business credit card account. The importance to this includes;
Ascertains that all transactions of bank statement are recorded
Ensures there are no duplicated transactions
There is correspondence with both the bank account and the credit card balance
Helps in identifying any coding errors that are likely to have occurred
It will assist in detecting fraudulent activities.
In answering the final question about the action in the period end in QuickBooks, is that it would require the application of the ten accounting cycle steps. The fourth steps through to the tenth steps are customarily performed end of accounting period not necessarily the last day.