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Posted 02/24/2023 in Business Owner

Can bookkeeper do bank reconciliation?

Can bookkeeper do bank reconciliation?

Yes! In fact, that’s usually where all bookkeepers start! Whether you are on cash or accrual basis, the bank statements/transactions are one of the foundational elements that allow bookkeepers to confirm a transaction happened. To ensure your bookkeeper has all of the information they need, you will need to provide the bank statements for every month as they are generated (usually within the first few days of a new month). A lot of bookkeepers are given “view-only” access to the bank account, this way they can pull deposit details or a transaction detail list directly, without having to ask you for the same things over and over.

A big part of a bookkeeper’s job is to research items and verify they are accurately reflected on your financial statements. This all starts with the bank statements, credit card statements, and receipts! To make it easier on you and your bookkeeper, keep all business receipts and email or save them to a file your bookkeeper has constant access to. If a receipt or charge is vague, you can add notes to the receipt to confirm what the business purpose was. This is a HUGE help and will reduce the number of questions you are asked each month. This process will also be helpful if you are ever audited because you will be required to show proof of business expenses. Try to make sure your receipts are itemized (show every item you purchased) because this is required in determining if the entire charge was business related, or just a potion of it. As an example, if you have an Amazon charge and one item is for the business and the other was for yourself, without the itemization it’s hard to split the two for accuracy. This is also required in the event there were two different types of business purchases (one for office supplies, and one for shipping/packaging) as these will be separated on the financial statements for business and tax purposes as well. Make sure you provide all of the detail (including tax, shipping, fees, and how it was paid).

Bank reconciliations can be tedious and time-consuming, especially if you are co-mingling. Co-mingling just means you are mixing personal transactions in with business transactions, this is a big no-no if you are an LLC or Corporation. You can lose your liability protection if you do this as an LLC and as a corporation you could be looking at penalties. To make things easier on everyone, try not to make personal charges with business bank accounts or business credit cards. Instead, transfer funds from your business account to your personal account, OR write yourself a check. This will be recorded as an owner draw (as a sole proprietor or single member LLC) and will eliminate employees or contractors from seeing the many things you spend your money on personally.

I have seen clients spend money on dating apps CONSISTENTLY and although I don’t judge those people for spending their money how they want, do you want your bookkeeper to know this about you? If the answer is no, keep the charges out of the business.

Definitely some things to think about when it comes to your bookkeeper reconciling your bank accounts!

If you are looking for someone to handle your bank reconciliations, that's where we come in! Browse our directory today by clicking here.