Reconciling a checking account is an important financial step to take for every organization. Now with online banking and account histories always at your fingertips, the task of poring over bank statements and checkbooks would seem obsolete. However, the importance of reconciling a checking account has not diminished at all.
What does it mean to reconcile my account?
Reconciliation is the process of ensuring that two sets of records are in agreement. Put simply, you are verifying that what you think you have in your bank account is what you actually have in your bank account.
Why should I reconcile my account?
The most important reason for completing reconciliation is to catch potential errors. There are a lot of details to capture, which leaves bookkeeping prone to unintentional mistakes.
Reconciling your bank accounts also offers a layer of protection against embezzlement and fraud. Reconciling is crucial to ensuring the accuracy of your financial reports. To completely benefit from it, you should reconcile your accounts monthly.
Where to find help?
There are a number of user-friendly accounting software programs that can assist in reconciling a checking account. A simple accounting software designed specifically for nonprofits is called MoneyMinder. It is online, allows for multi-user access, and you can test it out with a 30-day free trial.
How do you reconcile an account in MoneyMinder?
To reconcile bank statements you match the transaction on the bank statements to the transaction in your accounting records.
- Go to Banking.
- Click on Reconcile.
- Select the bank account you want to reconcile. Click Next.
- Enter the bank statement ending date and the ending balance. Click Next.
- Check off each item that appears in MoneyMinder that ALSO shows up on your bank statement.
- After you’ve checked off all of the items on your bank statement, does it show you’re “Out of Balance by”? If so, we’ll need to figure out what’s showing on your bank statement that has not been entered in MoneyMinder. Or is there a discrepancy on one of the dollar amounts?
- Once everything agrees you’ll see a button that says “Record Reconciliation”. Click that to complete your reconciliation.
Luckily for consumers, technology has made reconciling a checking account a little bit easier. Check out a program like MoneyMinder and once you have your reconciling routine in place, this little task will become a breeze.