Answers · Bookkeeping
Bank Reconciliation: Why It Matters
Active small businesses should generally reconcile bank and credit-card accounts at least monthly.
This question is answered in full on the main page for it.
How it works
The rule, and what it turns on.
Reconciliation compares the books to independent statements and identifies timing differences, duplicates, missing transactions, fees, fraud and misposted transfers.
Example
Statement ends at $24,150 while books show $25,000 because an $850 check is outstanding; the reconciliation explains the difference instead of changing the books.
Common mistakes
What we see go wrong, and what we do instead.
- Reconciling to online available balance.
- Marking items reconciled just to get to zero.
A better approach
- Use daily feed review plus formal monthly statement reconciliation.
Authority
Where this comes from, so you can check it.
IRC §6001; Treas. Reg. §1.6001-1; IRS Publication 583; IRS Small Business Recordkeeping guidance.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
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