Reconciliation (Term Tuesday)

Reconciliation aka Balancing the Check Book

Definition

Investopedia defines Reconciliation as “An accounting process used to compare two sets of records to ensure the figures are in agreement and are accurate. Reconciliation is the key process used to determine whether the money leaving an account matches the amount spent, ensuring the two values are balanced at the end of the recording period.” http://www.investopedia.com/terms/r/reconciliation.asp

If you use a Bookkeeping software you most likely enter the transactions that go through your bank account or credit cards into the software but just “Entering” those transactions does NOT mean you have reconciled your account most bookkeeping software’s have another area in which you compare your accounts in two different forms to make sure everything has been entered at the end of each month! If you have not been completing this second area of reconciliation you might want to contact a bookkeeper to help you to actually complete your Reconciliation’s.

 

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