The Importance of Monthly Account Reconciliations and Reviews
As a business owner, you must review your financial reports regularly to ensure your business is on track. One crucial aspect of this process is reconciling your accounts each month. Once you’ve completed your reconciliations, it’s time to review your financial reports and look for any discrepancies in your budget.
Reviewing your Profit & Loss statement should be a priority. Look for inconsistencies and try to understand why things are different. For example, are there any areas where you’ve experienced more significant sales or expenditures than expected? Or perhaps there are areas where you’ve fallen short. Understanding why these fluctuations have occurred is crucial to the health of your business.
QuickBooks provides an excellent tool to help with this analysis. You can compare your Profit & Loss statement for the current month with the previous month and quickly identify any significant variations. This information can help you identify trends and adjust your operations accordingly.
In addition to reviewing your Profit & Loss statement, it’s also essential to review your accounts receivable and accounts payable reports. These reports provide valuable insights into your cash flow and help you identify any potential issues that may arise.
By reviewing these reports regularly, you can catch items that need to be adjusted early, saving you time and money in the long run. For example, early intervention may prevent misunderstandings or potential losses if an account is aging. Aging payables may also indicate missing something, which could lead to negative business relations and credit issues.
Lastly, it’s crucial to reconcile and review your accounts while the entries are fresh in your mind. This approach makes it easier for everyone involved to resolve any issues quickly.
At ZümiFi, we understand the importance of proper bookkeeping and financial management. Therefore, we work with our clients to ensure their books are up-to-date, accurate, and reviewed regularly.
Contact us today to learn more about our services and how we can help you keep your business on track.