Common Accounting Mistakes: Part 3

Not Reconciling Your Books: We definitely understand that things get busy and some tasks fall through the cracks. However, reconciling your books is extremely important and should be done as often as possible. By that we mean, a bare minimum of once a month, preferably once a week, and if you can find the time, then (this depends slightly on the amount of transactions your company typically has) once a day. I know to some that last one will sound a bit like overkill, but if this becomes part of the daily task, then it won't take that long to complete.

What does this look like? One of the reasons we say that performing this task more often is better, is due simply to the fact that we as people forget things. Remembering what happened on the first day of the month two months ago on the last day of the current month can be difficult. This is why we recommend setting up a routine. Maybe it's scheduled for a certain time during the week. If a company doesn't have a large amount of transactions, then maybe it's the first task on Monday morning or the last task on Friday. Regardless, it's important to have this task on the schedule so that it's not forgotten about.

From a different angle, maybe the company has a large amount of transactions on a regular basis. If this is the case, then it's probably a good idea to consider performing this task daily as opposed to weekly. In this scenario, maybe the schedule is set for completing the task in the morning or maybe it's just before you leave for the day. Regardless, you sit down, add in the transactions that appeared on the bank website, and check to make sure that this matches the acccounting records.

What to remember: Whatever schedule is choosen to get this task done, make sure that it is on a regular basis and that it's a scheduled task not just an afterthought.