It’s great to fill your Quickbooks account with transactions… In fact, it’s essential to enter all of your company’s business transactions into some type of accounting system. Whether your business has 30 employees, just one — or even just yourself — it’s important to track the checks written, the deposits made and the debit transactions that have taken place and know the true balance in your bank accounts. However, this information is useless or even worse, misleading, if nobody is reconciling the accounts on a regular basis. Have checks been entered twice? Has a deposit been entered as an expense? Is anything missing? These mistakes happen and can only be uncovered through proper reconciliation.
Just as you should balance your personal checkbook and bank statements each month — making sure that the transactions and balances at the bank match your own accounting, likewise, good business accounting requires that all transactions have been entered correctly so that your expenses and income reports are accurate — giving you the true balance in your business bank account.
No business owner wants to have income reports that are inaccurate and misleading. Relying on balances that just aren’t there can cause a world of pain when it comes to business. It would mean that the information you give your accountant for tax preparation might result in you paying more tax than you actually owe! Or even worse, if you get the numbers wrong in declaring your income, and come up short, you could get yourself into very hot water with the IRS — and that’s one thing you definitely don’t want to do!
EDGE Bookkeeping & Accounting provides accurate, organized reporting that your tax preparer will love! We’ll make tax time a non-event.