Question

Why is it important to reconcile bank accounts and credit card accounts on a regular basis?

Answer 1

Reconciliation refers to the process of matching business transactions entered in books with your bank/credit card company’s records. It is highly recommended to reconcile the bank or credit card accounts on a regular basis to ensure accuracy of the accounting records. The reconciliation helps in the following ways:

--Timely notification of any fraudulent transactions

--All business transactions such as deposits, payments, and bank fees are accounted for in books.

--Any discrepancies between company's records and the credit card companies are resolved in a timely manner

--By reconciling company makes sure that it is not overpaying for something because of a clerical error.

--With regular reconciliation financial statements accurately reflect expense and sales activities.