Bank reconciliation involves more than just looking at a bank statement. This is a big window into the financial health of your company. A bank reconciliation involves matching all the entries of your bank account, credit card and if applicable loan statements with the records from your business accounting method. The accounts generally include all bank accounts, checking & savings accounts, any loan accounts, as well as any interest
accounts.

For the bank reconciliation to be considered done the transactions
in Quick Books and the amounts of the transaction information from the bank should match. In the process of doing the reconciliation, bookkeepers should check that the transactions are categorized correctly. The reason to do a bank reconciliation is to have a clearer picture of money coming in and money going out of your business. This is also the place where you can first find financial problems.

It can show if your records are missing a deposit, or a check that has not cleared the bank. Reconciliation also can show possible fraud happening, or if a particular part or department of your business needs additional attention. Because bank reconciliations contain so much information, they are often used in addition to Financial Statements for lenders to have a clearer understanding of a company’s financial health.