Set a Reliable Bank Reconciliation Routine
Reconcile your business bank account at least monthly against its statement. The IRS specifically recommends monthly checking account reconciliation. Businesses with high transaction volume or tight cash may also review activity more frequently, while still preserving a completed statement reconciliation for each period.
Use a consistent closing point
A reconciliation compares the statement balance with the books as of the same date and explains differences such as outstanding checks or deposits in transit. Comparing today’s online bank balance with last month’s report mixes different periods and can create confusion even when both records are accurate.
Address unusual activity sooner
Daily or weekly monitoring can help an owner notice unfamiliar withdrawals or a failed customer payment promptly. That monitoring serves a different purpose from the monthly close. When a suspicious transaction appears, review it with the appropriate bank or authorized person instead of waiting for the monthly report.
Preserve a history you can follow
Save the completed reconciliation and statement, then carry the verified ending balance into the next month. Investigate old outstanding items that never clear. If a previously reconciled transaction changes, review the effect rather than adding an unexplained adjustment. For example, editing a check amount from three months ago can disturb the current opening balance. A regular routine keeps those changes visible and makes later tax preparation or repair work easier to trace.