How important is reconciling accounts for a small LLC (Quickbooks)?

Question

We are in our first year of starting a small LLC. We are using Quickbooks Online and things are going well. The only exception is that, due to our lines of credit and bank accounts being personal (shared with business), we are having trouble reconciling our accounts. Is this completely necessary? If so, why?

Answer 1

Hello, reconciling cash accounts is not the best use of time, but absolutely a must do. The nature of cash control is a business survival task. When cash is plentiful, there is no crisis. When cash is short, time to find out where the money went. This is the primary reason for reconciling: 1st - is assures you of deposited to the bank agrees with your Quickbooks Online.

2nd - it assure that all money spent has been recorded. This type of control provides credibility to the financial statement. Financial statements are only reliable when bank reconciliation are up to date. In my experience as consultant, I have experienced first hand owners who discover that cash has been mishandled, lost, stolen or borrowed (only for a short time). For Quickbooks online, bank reconciliation is a breeze once the necessary training, and or internal procedures are established.