Whether managing a household budget with the use of a personal checking account or working in the accounting department of a business, chances are that most people will engage in account reconciliation on a regular basis. Essentially, this process has to do with making sure that the amount of liquid assets shown in the checkbook are identical to the account balance shown on a bank statement as of the same date.
One of the first tools needed for effective account reconciliation is documentation for each transaction conducted in the period of time under consideration. People should keep all deposit slips, records of withdrawals from ATMs, electronic payments, canceled checks, and the last set of bank statements together until they have reconciled the period in question. Being able to quickly verify the beginning balance for the period and then account for each transaction with a document will speed up the process of either affirming that the account holder and the bank are in agreement, or will help her to quickly spot any discrepancies.
Should the account holder find a discrepancy of any kind, she should use her documents to isolate the origin of the issue and get in touch with the bank immediately. For example, she might notice that the beginning balance for the period does not match the ending balance for the previous period, even though everything reconciled at that time. This is a sign that she may need to speak with her financial institution and find out what occurred. Chances are that it is a simple error that will be corrected once it is brought to the attention of the bank. Without having the documents in order and reconciling the account, however, the discrepancy could go unnoticed for months and become very hard to track down.
Account holders should remember to set aside a specific time each month for account reconciliation. Putting off the task will simply make it harder. While this may not be a big problem at first, people should keep in mind that, if there is something to research, it is much easier to do the investigation sooner than later. This is especially true in business, where an employee with an authorized debit card on a travel account may have failed to turn in a receipt. Jogging his or her memory and getting a copy of the receipt will be much easier if the event occurred in the last two weeks rather than two months ago.