QuickTips: Tips & Tricks For Bookkeeping Success
Rather than looking at your bank reconciliation responsibility as a chore, consider thinking about it as a monumental money-saving opportunity. No, I’m not joking. In fact, I’m very, very serious. It’s time for all business owners to realize the true value associated with reconciling their bank accounts.
Sure bank reconciliation is great way to validate your accounting and correct bank errors, but it’s truly so much more than that. When you consider the fact that a simple bank reconciliation process is your business’s first line of defense when it comes to fraud detection and prevention, the savings associated with this simple task could be astronomical.
Accounting professionals are often overjoyed to learn that their clients are regularly reconciling their bank accounts. As for those who aren’t yet on the reconciliation band wagon, you can expect us to work extra hard to demonstrate the value of this little exercise.
Read Also: Build Up Your Organization’s Resistance To Fraud
Truthfully, selling the value of bank reconciliation isn’t hard. What is hard, however, is selling clients on the importance of putting the responsibility of reconciling their bank accounts above the hundred-thousand other jobs they are doing at any given moment.
The clients I tend to work with are a bit of a mess in the bookkeeping department (at the beginning that is). These are the people who have piles of unopened bank statements just sitting in a drawer. These people are the ones who are content to occasionally check their bank balance online and trust that the number looking back at them is accurate.
Your balance might be accurate … but what if it’s not? And, if it’s not, how would you know?
Those of you who are active users of QuickBooks® should already know how simple it is to reconcile with your bank statement. Today’s tips will take you a bit deeper and will help you deter fraudulent activity from occurring in your business.
QuickTip: Bank Reconciliation For Fraud Detection
Here’s the deal, when you think of somebody stealing from your business, it’s easy to assume that you will notice if your bank balance is short by a large sum. But occupational fraud doesn’t always play out this way. In fact, it’s more likely that fraudsters will claim smaller amounts of cash over a long period of time and these small amounts will often go unnoticed each month if you are only checking your bank account online.
I’ve seen fraud occur in the form of a small debit charge that has gone unnoticed over a significant period of time and I’ve seen fraud present itself as a check that was changed or copied. Over time, these small instances of fraud can (and do) add up and can do significant damage to small- to mid-sized businesses.
Read Also: Build Up Your Organization’s Resistance To Fraud
Simply taking a few minutes each month to review your bank statement and actually look at your canceled checks can be the system you need to stop fraudulent activity in its tracks.
BONUS TIP: It’s not only your bank accounts that need reconciling. Credit card statements should be reconciled too. For this reason, I’m not a big fan of the paperless statement.
QuickTip: Bring On The Bankers
As small business owners, we simply don’t have the resources available to hire a full-time cybersecurity team, BUT we do have the ability to forge a strong relationship with our local banker.
During last month’s QuickBooks For Business Success session, a local banker stood up and provided attendees with some valuable tips and information. She encouraged everybody to reach out to their bankers and to ask them to work with you to ensure that you have systems in place to detect fraud in your business.
Most banks have people on staff who can help you review your internal control processes and systems. In fact, I’m pretty sure that most bankers would be thrilled to have this conversation with their customers for the sheer fact that fraud isn’t something they like dealing with either. Not only does fraud steal your business’s resources, it steals the bank’s resources as well. So it’s important that you manage your defensive strategy as a team.
This month, put aside some time to reach out to your bank and spend a little time reviewing their fraud prevention processes and procedures. Then, put some time on your calendar every month to sit down and reconcile your accounts. Not only could these simple tasks save you a lot of money, they will provide you with the ever-important peace of mind.
By Matt Long (Wooster office)