Friends of mine owned a business and they kept their financial records on QuickBooks. Every month when they received their bank statement, they opened up QuickBooks on their computer and reconciled their cash transactions with their bank statement. Because they recorded their information on a regular basis, the bank reconciliation took no time at all. Once in awhile I would be at their business when the bank statement arrived and they were actually happy about receiving their bank statement. This type of reaction is not what I am used to, so I was quite proud of them.
I believe that people do not like to reconcile their cash because it is too easy to procrastinate recording daily cash transactions. When the bank statement arrives, their records are scattered around their office. Sound familiar? It does to me: I procrastinate about washing the dishes. I would rather clean stalls all day than wash dishes. If I wash them every day and don’t let them pile up, then it isn’t so bad. Once they start to pile up, I turn off the light and walk out of the room.
Are you like my friends, someone who keeps up with the daily maintenance of recording cash transactions–or do you procrastinate and throw your bank statement in a corner when it arrives?
Before I give you my thoughts and tips on bank reconciliations, I want to know what your questions are and why you reconcile or don’t reconcile your cash.
Help me help you rein in the mystery of cash reconciliations. Please email your thoughts on cash–or on procrastination in general business matters–at the address to the right.