Virtual bookkeeping is big nowadays, and unlike what you may think, it’s not just for small businesses.
Companies that generate millions in sales are also part of the online bookkeeping bandwagon. It’s easier, definitely more convenient and is cost-effective for all types of businesses. Bookkeeping firms like your virtual Miami bookkeeping company offer a variety of services, from payroll to accounts receivable and financial reports.
Reconciliation is another virtual bookkeeping service that is crucial in preventing fraudulent activity and financial statement errors. The process proves and documents that account balances are actually in agreement. Reconciliation is actually one of virtual Miami bookkeeping company’s most popular service.
Virtual Miami Bookkeeping Company Takes a Closer Look at Reconciliation
Reconciliation uses two sets of records to ensure figures are correct, confirming that the money leaving an account in fact matches the amount spent. It comes in handy when an explanation is needed for differences on the account such as delayed payments or deposits. The main idea with reconciliation is accuracy, not discrepancy. It prevents balance sheet errors, checks for fraud and helps companies avoid penalty from auditors.
Two Different Ways to Reconcile
Since there’s no standard for reconciliation, you and your virtual bookkeeper can decide how often you want to have it done. You can choose from reconciling every day to every week, month or even annually. The Generally Accepted Accounting Principles suggest reconciliation by double-entry accounting and account conversion to be the main processes.
In the account conversion process for reconciliation, receipts, canceled checks and more are compared to entries in a business’ ledger. The ledger includes accounts for assets, liabilities, owners’ equity, revenue and expenses.
Reconciliation For Individuals
With so much fraud and identity theft these days, even individuals reconcile their books. These days, everyone’s personal information lives on countless servers across the world and data theft is big business. According to Symantec, Americans are more likely to be victims of identity theft with over 791 million identities stolen in 2016. France is number two, with 85 million identities stolen. Social security numbers are stolen, addresses, birthdays, drivers license numbers among other personal information. Even account takeovers have resulted in $2 billion in losses.
Sometimes, figures don’t match up just because of human error and not identity theft. Many people can attest to being charged twice in the same month for a gym membership or overpaying a phone bill. That’s money you’ve worked hard for, why should you give it away?