When you reconcile your bank account or statement, you compare your internal financial records such as bookkeeping records against the records provided by financial institutions. A monthly reconciliation helps your business to detect discrepancies and errors as well as identify any unusual transactions that might be caused by fraud actions. In other word, this practice can help your business inefficiencies in accounting procedures.
How often to reconcile bank statements?
Many business performs monthly bank reconciliation for identifying problems. It is the best to have a regular schedule and save bank statement or other related document for avoiding time-consuming task. Some businesses with a lot of transactions, reconcile on a daily basis. If something does not match with your record against bank statement, it might be due to timing differences that items or checks have not yet cleared. However, bookkeepers and accountants should be able to explain those differences.
Once you have figured out the reasons why bank statement and records do not match up, you need to record them by making adjusting journal entries.
Best Bank Reconciliation Practice and Tips
To reconcile bank accounts, you need to compare your internal record of transactions, balances, and descriptions to your monthly bank statement. Make sure matching the amounts and stating any memo or note for differences that requires more investigation and detail.
SBA released the official form to fill out for applying forgiveness on PPP Loan. Now that lenders are opening up for forgiveness applications. It is time to start prepare the documents need to qualify for full foreignness.
There are some documents and information requirements are universal to prove if you used the PPP Loan to cover any of following.
– Payroll costs
To prove payroll costs, you need to prepare:
Payroll service reports documenting wages and salaries paid to employees
Federal payroll tax filing (IRS Form 941 / 943)
State quarterly Payroll, Income, and Unemployment insurance reports
Receipts* for employee contributions to employee benefits
Receipts* for any retirement plan contributions
– Owner compensation
To prove owner compensation payments, you need t prepare:
2019 Schedule C (or January to February 2020) for Sole Proprietorships
2019 Form 1099-MISC (or January to February 2020) for Independent Contractors
2019 Schedule K-1 (or January to February 2020) for Partnerships
Receipts for compensation payment
If there is more than one individual included, provide a separate document that lists the names and payments to each owner.
– Mortgage interest payments
To prove mortgage interest payments, you need to prepare:
Mortgage amortization schedule or mortgage account statements
Receipts or cleared checks
– Rent/ Lease payments
To provide rent/ lease payments, you need to prepare:
Current Lease agreement and receipts or cleared checks
Lender monthly account statements
– Utilities payments
To prove utilities payments, you need to prepare:
Monthly utilities statements or involves
Receipts, cleared checks, or account statements
*Payment receipts, cleared checks, or account statements documenting the amount that the Borrower included in the forgiveness
What is next?
Once you have prepared all documentations, it is time to fill out the application form and upload supplemental documents into your portal.
Why is it important to have strong internal control within an organization?
A control environment is made up of a compilation of an entity’s organizational structures, policies, standards, and processes that maintain control across the organization. Having effective control environments with adequate internal control is essential for businesses to reduce the risk of asset loss and ensure reasonable assurance for stakeholders and businesses. Moreover, implementing a strong internal control, businesses establish solid protocols and procedures for their employees and partners. It allows businesses to prevent fraud and theft by separation of duties and organization of financial and management information.
Here are some best practices that should mitigate issues from happening in your business.
Segregation of Duties
Accounting Standards and Policies
We strongly recommend to educate and train your employees for prevention of fraud as well as errors and mistakes.
In an effort to provide better access to popular workshops, the Internal Revenue Service (IRS) has posted virtual versions of workshops on their website. The most recent installment focuses on tax compliance for exempt organizations including small to medium-sized 501(c)3 organizations.
Lessons include topics such as how to apply for 501(c)3 status, 990 overview course, and hiring employees. They are designed to help both new and pre-existing organizations. The IRS also offers certificates of attendance to encourage comprehensive education around a variety of topics.
January starts a new year and a new tax season. In the next month, you’ll receive an array of IRS forms reminding you that it’s time to file. The deadline this year is Monday, April 18, 2016, but once you’ve received all your forms it’s never too early to file. For standard filers, here’s what you might expect to get in the mail:
Form W-2 from your current or past employers.
Form 1099-INT or 1099-DIV from any financial institutions from whom you earn interest.
Contractors will receive form 1099-MISC with total miscellaneous income earned.
Homeowners will receive form 1098 with total mortgage interest payments.
Students will receive form 1098-T with total tuition paid; students with loans will receive form 1098-E with total interest paid on student loans.
If you’re a small business owner, you’ll need to provide your tax preparer with a profit and loss statement so that they can complete a Schedule C.
Give us a call or talk to your preparer for a complete list of forms needed to complete your return.