Is Your Company Thriving or Just Surviving: Does balancing your bank statement take more than 10-15 minutes?

“Cash is king”  – and knowing how much cash you have is critical to a business owner’s peace of mind. Some owners in a cash crunch watch cash on a daily basis.  For those with a little more cushion with their cash, the simplest way to know where cash is is to reconcile your bank accounts on a regular basis within one week of the statement release each month.

Reconciling bank accounts can be a 5-10 minute routine operation or a several hour exercise in frustration.  Here are a couple of tips that can help bridge the gap between the two – these tips can apply to all systems but specifically reflect Quickbooks:

  •  Creating and using distinct payment methods for receipt of payments by different methods, such as cash, check etc and different credit cards
  • Use of undeposited funds accounts
  • Automatic vendor account settings

Creating and using distinct payment methods for receipt of payments will allow you to easily group payments that came in via check, cash, specific credit cards, etc.

The use of undeposited fund account is a holding place for multiple deposits made via the same method (check, specific credit card, et) on the same day.  A second step sums up the total for the payments and transfers them to your  bank register in a lump sum, the same way the deposit will show up on your bank statement.  If you use this method, you will not spend endless time trying to match individual deposits to a lump sum deposit.

Each vendor has an account settings option to create a few default accounts that the expense will go to on your bank register whenever you write a check on download on online payment.   Take the time to fill these in.  This saves a lot of time and effort in the reconciliation process.

 Bottom Line:  You need to know where your cash is – so make it easy on yourself to track it!

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