Regular bank account reconciliation is a fundamental practice to maintain accurate financial records for your nonprofit. By reconciling your bank accounts monthly, you ensure that the transactions recorded in your books match those in your bank statements.
Reconciliation involves comparing your internal records, including income and expenses, with the bank's records. It helps identify discrepancies, such as missing transactions or errors, which can be promptly addressed, which is so much easier doing each month than trying to remember 8 months later. 😩
This process not only ensures the accuracy of your financial statements but also provides a safeguard against fraud or unauthorized transactions. Additionally, it enables you to monitor your nonprofit's cash flow effectively, making it easier to manage finances and plan for the future.
Bank account reconciliation may seem time-consuming, but it is a critical practice for maintaining financial integrity and ensuring the fiscal health of your organization.