Tuesday Bookkeeping: Why Reconciliation Matters More Than You Think
Bank reconciliation is how you know your books are right. Here's what it catches, why it matters for Washington small businesses, and how often to do it.
Tuesdays are bookkeeping day at B2B Solutions. Each week we share one practical tip to help small business owners keep their books clean, accurate and stress-free.
Your bank balance is not the same as your profit, and your bookkeeping software isn’t automatically right just because it’s connected to your bank. That’s where reconciliation comes in.
What reconciliation is
Reconciliation means comparing every transaction in your books to your bank and credit card statements and confirming they match, down to the penny. It’s how you know your numbers are real.
What it catches
- Duplicate transactions that bank feeds sometimes import twice
- Missing transactions, like a cash deposit or check that never got recorded
- Bank errors and unauthorized charges, which you only have a limited window to dispute
- Forgotten subscriptions still quietly billing you every month
- Uncleared checks that make your balance look bigger than it really is
Why it matters
Unreconciled books lead to bad decisions. You might think you can afford a new hire or a big purchase when you can’t. At tax time, errors can mean overpaying or underreporting, and fixing a full year of mismatches in April costs far more than catching them each month.
For Washington businesses, accurate revenue matters even more. B&O tax is charged on gross receipts, so if deposits are missing or doubled in your books, what you report to the Department of Revenue may be off too.
Lenders and investors also look for reconciled financials. Clean books make it easier to get a loan or line of credit when you need one.
How often to do it
At minimum, monthly, as soon as your statement closes. Busy businesses benefit from reconciling weekly. Either way, don’t let it slide: the longer you wait, the harder the problems are to trace. (If you’re already several months behind, a bookkeeping cleanup will get you current.)
This week’s tip
Reconcile December before you close out the year. It’s the best gift you can give your future self, and your tax preparer.
Not sure your accounts are reconciled?
We can help. Our monthly bookkeeping plans include reconciling every bank and credit card account, every month. Book a free consultation or call us at 360-529-2672.