My Executive Assistants | Counting The Days To Year-End Reconciliation
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30 Nov Counting The Days To Year-End Reconciliation

Even though you probably use business software, you still need to perform manual checks and balances to make sure your books are in proper order. These reconciliations are needed to ensure your financial reports are accurate and to do your business taxes. The most common year-end reconciliations require that you:

  • Reconcile your books with bank statements.
  • Reconcile your books with your investment balances, including capital gains and losses.
  • Reconcile accounts receivable to your general ledger.
  • Reconcile accounts payable to your general ledger.
  • Reconcile loans accounts with information from your lender.
  • Reconcile withholding statements if you have employees or independent contractors.
  • Reconcile cash receipts and petty cash funds.

Reconciliation mistakes can be costly. Inaccurate records can cause problems with the IRS. Inaccurate financial accounting can also mean that you miss substantial write-offs and deductions that could reduce your business tax liability. Account reconciliation problems can occur for a variety of reasons. Here are some of the most common causes:

  • Frequently, records have simply been rolled forward without appropriate account reconciliations.
  • Sometimes problems occur when changes have been made in accounting software or accounting methods.
  • Differences in accounts may have been quantified but not actually resolved.
  • Action has not been taken to resolve open issues or to confirm that open lists have been resolved.
  • Companies can reconcile amounts properly but fail to treat them correctly in statements.

Many businesses rely on their accountants to “fix it.” The problem is that this is costly and while your taxes may be filed on time, the underlying weaknesses in your bookkeeping system may remain. This will cause you problems next year all over again.

So what’s the answer?

My Executive Assistants specialize in small business bookkeeping. The messier the better! We can come in, get your records in order, perform all necessary reconciliations, and set up an easy-to-follow system that will make next year a breeze. Here are some of the solutions we provide:

  • Digitize records and receipts so they are easily accessible.
  • Rationalize the accounts; many businesses add accounts over time and this results in a larger volume of accounts than is necessary.
  • Examine all accounts to ensure that differences have been investigated and that reconciliations are accurate and reflected correctly in general ledger and sub-ledger balances.
  • Perform a separate reconciliation for each balance sheet account, including the general ledger, financial reporting, legally required accounts, and flow-through accounts. Maintaining separate transaction accounts for separate transaction flows, such as accounts receivable and payable, and separate bank accounts for separate cash flows.
  • Look for fraud or misstatement in records, and set up criteria for examining accounts and records based on the risk level in your business.
  • Make reference to any reconciliation adjustments in journal entries.
  • Enter all reconciliation into standardized forms that can be worked with easily by your accountant and bookkeeping staff.
  • Attach all supporting documentation to account reconciliation forms and make sure file names and organization avoid duplication or replacing of older file versions.

Provide a status report on reconciliation status and identify reconciliations that need resolution or further action.

Even if you have a bookkeeping staff, chances are you and they are too busy with doing transactions – inflows and outflows – to take a comprehensive look at records and perform necessary reconciliations. Our goal is not to replace your bookkeeping staff, but to help them be more efficient. Small businesses with fewer than 25 employees spend an average of 40 frantic hours each year, pulling together year-end reconciliations. My Executive Assistants can help you avoid the panic all together.

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