Whether you run a small IT staffing business owner or laying large venture into the world of staffing business, one thing that you must pay very close attention is on ‘Bank reconciliation’. Because it’s the key to better business management and you have to get it right so your finances stay in control. Getting it wrong could end you up in overpaying taxes.
If you’re wondering what could be more in detail about bank reconciliation and all that it entails, we try to elaborate as much as possible in this blog.
What is a bank reconciliation and why is it important?
Bank reconciliation in simpler words means the process to ensure that the business accounting records match with the information in bank accounts. Generally, it involves the opening and closing balance of any business, along with individual transactions.
For instance, lets imagine you buy a flight ticket for a business trip on your company’s debit card and it appears on your bank statement. So, you’ll need to record that particular transaction in your accounting ledger, if not your accounting records will mismatch and show different number in your bank account. This whole process of matching transactions after recording is known as bank reconciliation.
Now you have the answer when someone asks, “What do you mean by bank reconciliation?”
And, yes something more has to be added here that bank reconciliation also helps in tracking various other financial aspects in business banking. It allows you to check what money is coming in and going out from your account, so it becomes easy to trace out any suspicious activity.
Why is bank reconciliation important?
As aforementioned, getting the bank reconciliation process wrong would land you in complex position of having an inaccurate view on the money in your bank account. That would cost you serious consequences, and many business owners make a mistake of not setting up the opening balance of their IT staffing business accounts to that of their bank accounts before starting to record transactions in their accounting records. There were many situations that experts suggesting to perform bank reconciliations on a month-on-month basis, so that you can save time as well as relieve stress.
Bank reconciliation advantages:
First and foremost, when you do it right you’ll never overdraw your account because you would be aware of the amount which you can spend. This way your credit score is never dropped! Beside, few banks do offer overdraft protection, but they would charge a bomb for using that service so better to avoid such protection that creates even more problems.
Secondly, you will protect your money from theft. Wondering how? See, when you can compare your transactions in book with the financial transactions of bank, you’ll be able to easily spot the discrepancies, and examine the entries that are not listed in books. More importantly, you could be able to trace out the bank transactions that are unauthorized by self, and reveals an evidence of theft when attempted.
It gives you a leverage to tell whether the bank you rely on is worth it or make mistakes due to entry errors. And, you can correct them by pointing out after the reconciliation process is completed.
Bank reconciliation is not just confined to IT Staffing, but plays a vital role for various other businesses in detecting accounting flaws that occur, such as, double payments or missed payments, and even checks lost. You’ll have records accurate and be able to track the transactions which have been outstanding and are cleared.
Advantages, process and importance, it’s all discussed and now let’s get into doing it correct way. Face it, as human beings we are prone to make errors due consultant hiring, placement, grooming and things associated with it in IT Staffing industry. Due to incorrect balances, transaction discrepancies it may lead to unnecessary financial complications such as overdraft fees and bounced checks.
This is where an accounting software for IT Staffing companies come into place. And, Nimble Staffing stands out to be a top-notch accounting platform that lets you reconcile your bank accounts in a safe and secured manner.
Auto Reconcile your Bank Accounts with Nimble Staffing to get feeds automatically and eliminate accounting errors, evade transaction discrepancies and keep your business deposits accurate, while saving both time and money.
Nimble Staffing is not just about auto bank reconciliation, but much more than that. It offers you a wealth of accounting features and functionality wherein you and your team can handle a host of business challenges involved with Invoicing, Timesheet Management, generating Financial Reports, managing Consultants, consolidating Intercompany Accounts, tracking your consultant VISA Expires & Renewals, analyzing Sales & Recruitment Staff Performance, Commission Calculations, Project Start/End dates, Tax Payments’ calculation, and A/R & A/P, etc.