At the office of Charles L. Bassett Jr. CPA, we offer a wide range of services to help you manage your finances. One service we will focus on in this article is financial reconciliation.
Keep reading to get an overview of what financial reconciliation is and how it works.
- What is Financial Reconciliation? – Financial reconciliation is the process of comparing two or more sets of financial data to look for discrepancies between them, then resolving those discrepancies. The purpose of this process is to make sure your financial data is accurate and up to date—that way, you won’t accidentally spend money you don’t have.
- How Does Financial Reconciliation Work? – In previous decades, financial reconciliation was done by comparing paper documents, such as paper bank statements and handwritten checkbook ledgers. These days, much of the process is done using digital records instead, but the process is still largely the same. Our certified public accountant will go through your records item by item, verifying each entry against a secondary source, such as a receipt, invoice, bill, or bank statement. He’ll take note of any gaps or discrepancies, then investigate further to resolve these discrepancies. By the end, you will have an accurate, up to date summary of your finances.
- What are the Benefits of Financial Reconciliation? – As we mentioned above, one of the benefits of financial reconciliation is making sure you have an accurate report of your finances, so you don’t accidentally spend more than you have. Financial reconciliation is also an important tool for detecting fraud. Businesses are also required to undergo routine reconciliation to remain compliant with local laws.