Last month I helped a new client clean up his 2018 books in order to get ready for tax time. He, like so many small business owners, hadn’t reconciled his checking account all year. He was, rightly, too busy servicing his clients. As I worked through the bank statements, I found about five checks totaling almost $3,000 that he deposited using his banks via mobile deposit app that he never got credit for! He knew to wait until he received confirmation that his deposit was accepted before closing his bank’s mobile app, but after we discovered the problem, he noticed that he never received email confirmations for those deposits. Somehow that $3k just got lost in the ether. I suppose that’s better than crediting the wrong account, but still, a little scary! Luckily he kept the checks in a file so he was able to track them down and ask the customer if they had cleared their bank. They hadn’t, so he was able to either re-deposit them or get replacement checks issued.
Two key takeaways:
1) Reconcile every month! With QB Online or other cloud based accounting software, and regular and correct categorizing of bank feed transactions, the reconciliation process is truly painless. Your bookkeeper should be willing to train you on best practices and efficient workflow so that categorizing these transactions and reconciling is fast and easy for you. It also helps you keep tabs on your business each month, and reduces the anxiety that comes from putting things off.
2) Don’t throw away checks you have deposited via mobile app. New technology isn’t always perfect.
A bookkeeper can be a powerful ally. I was thrilled to find “extra” money for my client and demonstrate my value to him in such a tangible way. The intangibles are harder to quantify, but the peace of mind that comes with knowing we are looking out for you is priceless.