Bank reconciliation for Los Angeles businesses

Short answer: Bank reconciliation for Los Angeles businesses compares every account in your books with its statement for the same date, line by line, until the balances agree. Checking, savings, credit cards, loans and processor balances such as Stripe or Square all get reconciled every month. Differences are found and fixed, not forced, and a report is saved for each month.

What reconciliation proves

A reconciliation compares each account in your books with its statement for the same date. When they agree, and every difference is a real timing item like a check not yet cashed, you know the cash numbers are right.

When they do not agree, something is missing, doubled or coded to the wrong account. Reconciliation finds it while it is one month of work, not twelve.

Accounts that need reconciling

• Every business checking and savings account
• Every business credit card, including cards used by employees
• Loans and lines of credit, against the lender's statement
• Payment processor balances, such as Stripe, Square, PayPal or Shopify Payments
• Payroll clearing accounts, if your payroll provider uses one

What a real reconciliation looks like

1. Match the ending balance Start from the statement's ending balance, never from what the books say it should be.
2. Tick every line Each deposit and withdrawal is matched to a transaction in the books.
3. Explain the leftovers Anything uncleared is a real item, such as an outstanding check, with a date and a reason.
4. Fix, do not force If the numbers differ, the error is found and corrected. An adjustment entry to make it balance is not a reconciliation.
5. Save the report The reconciliation report is kept for each month, which is what your CPA or a lender may ask to see.

Signs a past reconciliation was forced

A reconciliation discrepancy or adjustment account with a balance. Uncleared items that are years old. A reconciled balance that changes when you run the report again later, which means someone edited a reconciled transaction. Any of these means earlier months need another look.

Common reasons the numbers do not match

A transaction came in twice, once from the bank feed and once from a manual entry or a statement upload. A check was written and entered, then voided at the bank but not in the books. A transfer between two of your own accounts was booked on one side only.

Card accounts have their own traps. A payment to the card from checking gets recorded as an expense instead of a transfer. A refund from a vendor gets coded as income. A card's feed breaks for a few weeks, and those weeks are simply missing from the books.

Payment processors add one more layer. A Stripe or Square payout is the net of many sales, fees and refunds. If only the payout is recorded, the bank reconciles but sales and fees are both wrong. A full reconciliation checks the processor balance too.

Reconciliation on its own, or as part of monthly books

Some owners want only reconciliation and do the coding themselves. That works if the coding is good. Most find that once someone else is matching every line, it takes little extra to code it too, which is what monthly bookkeeping is.

Where we work

We keep books for businesses across the City of Los Angeles, the Westside, the Eastside, the San Fernando Valley, the San Gabriel Valley, the Gateway Cities and the South Bay.

• Alhambra
• Arcadia
• City of Industry
• Commerce
• Diamond Bar
• Downey
• Downtown Los Angeles
• East Los Angeles
• El Monte
• Koreatown
• Lincoln Heights
• North Hollywood
• Pasadena
• Pomona
• San Fernando Valley
• Santa Fe Springs
• Santa Monica
• Sherman Oaks
• South Bay
• Van Nuys
• Vernon
• West Covina
• West Los Angeles
• Whittier
• Woodland Hills

Questions