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Why Regularly Reconciling Your Business Accounts is Important

Why Regularly Reconciling Your Business Accounts is Important

Running a 501c3 nonprofit organization is difficult. There are so many moving parts to take care of, and it can be difficult to keep track of everything–but you have to make sure that you regularly reconcile your business accounts.

If you don’t have any idea what we’re talking about, don’t worry! You don’t have to do the bookkeeping for your nonprofit organization alone. Good Steward Financial Company is here to help.

Good Steward Financial Company is a virtual bookkeeping and accounting firm that specializes in a broad range of 501c3 services and small businesses. We are your premiere source for nonprofit bookkeeping services.

At Good Steward, our job is to take care of your finances so that you can focus on your mission, and part of that objective is regular account reconciliation.

What is Account Reconciliation?

Let’s start with the basics: what is account reconciliation, and what does it mean for bookkeeping for nonprofits?

Account reconciliation is comparing two sets of financial records to make sure that all the data is correct and identical.

The process involves a complete review of all of your bank statements, balance sheets, and ledgers, as well as making necessary entry adjustments.

Account reconciliation is a critical element of nonprofit bookkeeping–and if you’ve ever balanced your personal checkbook, then you are already familiar with the basics of account reconciliation.

Regularly reconciling your accounts confirms the accuracy of your general ledger, and it gives you a chance to resolve discrepancies in your financial records. Some discrepancies are normal, often due to the timing of payments, deposits, and transfers.

However, account reconciliation also reveals more dangerous discrepancies that can be warning signs of financial mismanagement, fraud, or compliance issues.

There are different account reconciliation methods, and the one you use will depend on your nonprofit organization’s bookkeeping needs.

“Regular” account reconciliation can be done daily, monthly, or annually, although most small businesses and nonprofit organizations opt for monthly account reconciliation.

If your nonprofit already uses double-entry accounting, this technique will make account reconciliation go much more smoothly. Double-entry accounting makes it easier to catch errors in both your credit and debit account entries.

Why is Reconciling Business Accounts Important?

Regularly reconciling business accounts is the key to your nonprofit organization’s long-term fiscal health. Account reconciliation is the best way to find discrepancies and fraud before they cause problems.

Regular account reconciliation gives you an accurate overview of your nonprofit’s financial standing, allowing you to make more accurate budgets, manage your cash flow better, and eliminate redundancies or inefficiencies.

Not reconciling your accounts on a regular basis leaves room for fraud, non-compliance, and financial crises. You may make financial decisions based on an erroneous view of your organization’s financial resources.

You could also find yourself facing heavy penalties after an IRS audit, losing funds to embezzlement, or dealing with identity theft.

Regular account reconciliation identifies all unusual transactions or mistakes as soon as possible. If you put it off, these problems will go undetected for longer–costing you more.

If these risks are making you feel overwhelmed or stressed, take a quick breath. You don’t have to do the bookkeeping for your non-profit organization all by yourself.

Unsure where to start? You don’t have to hop on Google and blindly search for “nonprofit bookkeeping services near me.” Good Steward Financial Company has your back!

Nonprofit Bookkeeping Services Near You with Good Steward Financial Company

Good Steward Financial Company is your best source for 501c3 services. We can help your nonprofit organization with everything from account reconciliation to:

  • annual audit assistance
  • cash flow management
  • fractional CFO services
  • payroll processing
  • QuickBooks services
  • full-service accounting and bookkeeping for non-profits and small businesses

As a Christian company, service is at the heart of Good Steward Financial Company’s mission. That’s why we specialize in nonprofit organizations and small businesses. We are dedicated to making the world better by helping your nonprofit help others.

Don’t risk a financial crisis! Contact us today to learn about how regular account reconciliation and our other 501c3 services can keep your nonprofit at peak fiscal health.

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