We say it time and time again - it’s vital to reconcile on a regular basis! But, what does that really mean and how do you reconcile? And, why bother?
To reconcile, in accounting terms, means you compare two sets of reports to make sure the numbers match up. This involves your internal bookkeeping records and your bank account, credit card statement, or similar. It’s a simple process of verification, but can be a huge life saver. You should get in this habit of doing this - you’ll catch mistakes sooner and be able to adjust accordingly quicker.
Reconciliation should happen on a monthly basis since most statements arrive monthly. This is also a short enough amount of time that if things don’t align, you will be able to fix them without too many
Mistakes can happen in your books, no matter who you are. It’s important to know why your mistake happened and how they can be avoided.