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The Importance of Reconciling Daily

The primary function of reconciling is making sure the bank’s records match your book’s cash transaction records. Just keeping good records isn’t enough. We see charges as they occur by reconciling daily, so we know the up-to-date current balance. If a check clears for the wrong amount, or a check clears for the second time (which is increasingly more common with ATM/mobile deposits), it could throw off a business’ account balance and could cause other outstanding items to be returned unpaid. Knowing your current balance will help prevent bounced checks, overdraft fees and improve liquidity management. Daily reconciliation is also the best defense against losses caused by unauthorized transactions.

We can’t talk about banking today without mentioning fraud. The 2018 Identity Fraud Study by Javelin Strategy & Research revealed that identity fraud victims increased by eight percent in 2017, rising to 16.7 million US consumers. The potential for fraud alone is reason enough to monitor bank accounts daily. According to Regulation E’s Consumer Liability for Unauthorized Transfers, waiting two business days to notify your bank of certain fraudulent activity can multiply your potential loss tenfold. If an account becomes jeopardized, it is vital to identify discrepancies immediately to prevent losses and ensure continuity for your business.

If you’re waiting until the end of the month to reconcile your bank accounts, you’re waiting too long. In today’s fast-paced global environment, far too much can happen in 24 hours not to monitor your accounts daily. This probably sounds like a daunting task with your already busy schedule. Why not let LBSI take a small amount of time reconciling your bank accounts daily to prevent you from spending considerable time and frustration if/when something goes wrong.

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