Do Your Accounts Reconciliation Weekly
We’ve all been there, unable to locate a certain transaction or unearthing a discrepancy in numbers. With the growth of technology in business, we now have software that can aid in the reconciliation process. Some may even go as far as doing portions of it for you. Regardless of your processes, reconciliation on a weekly basis is highly encouraged because this will illuminate any issues in your numbers before they get to out of hand.
One of the most common spots to find issues during the reconciliation process is invoicing. If you’re a large business, you can easily be sending multiple invoices a day for payment later down the road. Your accounting system can alert you to past due invoices, but it is up to you to determine how to go about retrieving those payments.
Reconciling on a weekly basis can allow you and your team to develop a process sending reminders to those who are past due. Typically one reminder will suffice, as paperwork can get lost in the day-to-day operations of the company. Not only that, you can begin looking at which ones you unfortunately may write off and move on from.
Time Equals Money
Balancing your books on a weekly basis not only allows you to stay on top of invoicing, but it allows you to stay on top of your own financials. Weekly may seem a bit much, but let us look at an example.
Say on the first of the month, you purchased a widget for $100 but documented it as a $95 purchase. If you were reconciling your numbers on a weekly basis, you could easily go back a few days and find the discrepancy. However, if you had waited until the 30th day of the month, it will likely take you more time to find the error.
You can equate it to personal finance as many of you likely look at your bank accounts at least once a day, ensuring the balances match what you have written down. This brings us to documenting everything and ensuring your records are in order. Everything works hand in hand and allows your business to operate smoothly.
For those of you who are short on time and are unable to allocate and hour or two each week, you can begin looking into a virtual assistant. This individual can work a few hours a week for your company, reconciling reports and documenting the discrepancies. Waiting 30 days or longer might be acceptable, but you open your business to more issues that will take a greater amount of time to correct.
Find the method the works best for you and your team and implement it as soon as possible. If you feel overwhelmed, start small and begin migrating one piece at a time. Weekly reconciliation will likely pay dividends further down the road.