Homeschool treasurers: before you prepare a financial statement for your board meeting you should reconcile your bank account!
Why is reconciling bank accounts so important?
Vickey Richardson of FreeChurchAccounting.com explains,
I have discovered with my bookkeeping business that reconciling accounts are not very high on some organization’s to-do list. When accounts are not reconciled … financial statements are usually NOT accurate.
REMEMBER…before generating your financial statements, there is a process you should go through to ensure the accounting reports you give your pastor, treasurer, or governing council are accurate and complete.
One of the most important steps is the bank reconciliation!
See how to reconcile your bank account and additional steps you should take BEFORE you start on your monthly, quarterly, or annual reporting …
(click for Vickey’s detailed steps )
I completely agree with Vickey. When I see regular bank reconciliations, the financial statements are almost always correct. When a organization does not reconcile their accounts, the financial statements are usually a mess.
Vickey also reminds us that credit card statements need to be reconciled too! And so do PayPal accounts. A credit card or PayPal account is really just a type of bank account with inflows and outflows. So reconcile them monthly as well.
Carol Topp, CPA