Simply stated, account reconciliation is a comparison between your records and the statements provided by bank and credit companies. While the process of account reconciliation is long and tedious, it’s an extremely important step in your monthly bookkeeping tasks. It helps you find any mistakes on your statements, double charges, missed payments you otherwise may have thought went through, your own payments that may not have went through, etc!
If you have your private practice bank statements just sitting around, or in your online banking, but you never look at them, now is a great time to start! You don’t want to miss out on any of those tax deductions for therapists, or miss a double or fraudulent charge!
We’ve put together some tips and tricks to make account reconciliation not only an efficient part of your private practice bookkeeping process, but also a painless one!
1. Keep Your Receipts
In order to reconcile your accounts in the first place, you need to have something to compare and verify your statements with. Make a habit of storing your receipts as soon as they are received. Our recommendation is to snap a photo and upload right away! Digital copies are much more difficult to misplace!
2. Have all Documentation Together.
The most efficient way to reconcile your private practice bank accounts is to start with everything in one place. Having to search for missing receipts, statements, and other documentation doesn’t allow for a quick and thorough run-through. Have a designated area to keep all of your private practice documentation in one place, so it’s ready to go when you are! Whether you like digital copies or hard copies, find or create an organization system and put it to good use!
3. Separate into Sections to Reconcile.
The best way to do this really depends on your private practice expenses and bank accounts! You can reconcile by expense category, date of receipt, or by making your way down your private practice bank account statement. Or if you’d rather tackle all of your private practice income tracking in one section, then your private practice expenses in a different section, then do that! Whatever works with your private practice and also your organizational skills is what will make this the easiest for you.
4. Review Any Discrepancies Carefully.
If you’ve found a mistake or difference, or ‘discrepancy’ between your records and your private practice bank accounts – review and fix as soon as possible! If you put it off, you could forget it, but more importantly, it could be ‘expired’ by the time you take action. Meaning, sometimes with financial matters, there will be a date which you can no longer make changes or ‘return’ things. So the sooner, the better! And keep in mind, banks can make mistakes, too!
5. Automate the Process.
One of the best parts of utilizing an online accounting software for your private practice, is the automation available and how much time it will save you! You can link all of your credit cards and bank accounts for your private practice, directly with your bookkeeping or accounting software so that all of your private practice transactions automatically get pulled into the software and are ready for you to classify them!
If managing your private practice bookkeeping is just not a priority every month, please reach out to us for a free bookkeeping consultation! We’re happy to help ease the burden and free up your time to focus on your private practice!
