Doing Reconciling Effectively

Checking accounts just like any other bank accounts should be reconciled every month. Checking account holders should personally record the financial activities in his or her account. When able to do so, checking account holders should reconcile their personal record with the records that his or her bank can come up with. Through reconciling his or her personal financial records with the official bank records checks and balances can be done. Reconciling is in the interest of the account holders since it limits the margin of errors committed in the account.

Time is always of the essence in reconciling bank accounts, more particularly checking accounts. It should be done monthly, simply because piling up the needs for reconciling does not help in the process. As a matter of fact, it even complicates a lot of things for the checking account holder. Information might get lost or too hard to find if reconciling will be done in a fashion with longer time frame. The margin of error is greatly increased in situations where reconciling takes longer time and longer intervals.

Taking out the time and immediacy in the view, reconciling bank accounts is already troublesome. Anyone can be confused in the process. Even reconciling experts can be easily confused if dealing with too many recorded financial activities. To avoid committing the same mistakes, checking account holders should do reconciling in shorter time frames or simply follow these tips on efficiently reconciling bank accounts.

• Checking account holders should keep a record of all of his or her financial transactions. From simple purchases to interest gains everything must be recorded. Even by just keeping ATM receipts and other purchase receipts, checking account holders can easily keep track of their finances. The record that account holders keep will be then compared to the monthly statement that they will receive from the bank or other service providers. The checking account holders’ records serve as the basis of checking possible discrepancies and grounds for corrections.
• Discrepancies are normal in this stage of reconciling the checking account. There are still a lot of data from the account holders and from the banks which are not yet cleared. However, checking account holders should always note the parts that discrepancies are seen.
• Placing a simple check mark in the cleared items such as deposits, interest gaining, electronic transfers, fees, withdrawals, ATM usage and debit card usage is a good start for any checking account holder. The logic behind this simple action is simple; these are already cleared with banks which mean that it is most probable that these are already reconciled with the checking account holders list.     
• The part where deposits are written is the usual part where discrepancies can be encountered. But it is nothing to worry about, it is common that checking account holders’ deposits are cleared latter than their banks or service providers. Add up deposits to note how much is the amount in the deposits which is not yet reconciled by the bank.
• After adding up the deposits which are not yet cleared, checking account holders should move on to add up the withdrawals and fees which are not yet reconciled.
• After doing simple additions, the checking account holder is now ready to reconcile his or her account. He or she should compare the ending balance in his or her account with the deposits which are not yet cleared.
• The last step in the reconciling process is to subtract the withdrawals which are not yet cleared to the deposits made. By theory, the answer should agree with the amount that the account holder have recorded in his or her personal registry. 

In the event that the resulting amounts are not equal, the checking account holders should double check the way that he or she has recorded the financial activities needed to do reconciling. Simple omissions of characters can result to the failure of the process. This is the reason why checking account holder should still double check their records.