Reconciliation is one of the most important steps in the bookkeeping process. It’s where you confirm that the transactions recorded in your books match what actually happened in your bank or credit card account.
But before you click the “Reconcile” button, it’s worth taking a few minutes to review your data. Small errors made earlier in the process can turn into bigger reporting problems if they go unnoticed.
Here are a few things to check before reconciling your accounts.
1. Download and Match All Transactions
Make sure every bank and credit card transaction has been imported and properly matched in your bookkeeping software.
Missing or unmatched transactions will cause discrepancies in your ending balance and make reconciliation more difficult than it needs to be.
Taking the time to confirm everything is imported and categorized correctly helps ensure your books reflect the full picture.
2. Clear Any Duplicate Entries
Duplicate transactions can occur when data is entered manually or when bank feeds sync more than once.
If duplicates remain in the books, they can overstate income or expenses, which affects financial reports and potentially tax reporting.
Before reconciling, scan your transactions for duplicates and remove any that shouldn’t be there.
3. Review Outstanding Checks
Checks that have not cleared the bank can create the appearance of more cash available than actually exists.
If a check has been outstanding for an unusually long time, it’s worth investigating. It may need to be voided, reissued, or followed up on with the recipient.
Cleaning these up ahead of time helps prevent confusion during reconciliation.
4. Confirm Beginning Balances
Your reconciliation should start with the correct opening balance.
If the beginning balance doesn’t match the previous reconciliation or bank statement, it usually means something was changed or deleted after the last reconciliation.
Addressing this before starting prevents larger issues later.
5. Look for Uncategorized Transactions
Uncategorized transactions can distort your financial reports even if the reconciliation appears to balance.
Before reconciling, review any uncategorized or unclear entries so they are properly assigned to the correct accounts.
This helps ensure your reports remain accurate and meaningful.
Final Thought
Reconciliation should confirm that your records are accurate, not be the place where problems are discovered for the first time.
Taking a few minutes to review your transactions beforehand makes reconciliation faster, smoother, and more reliable.
Clean data going in leads to clean financial reports coming out.