Reading time: ~3 minutes
Last week we separated the money — business in one account, personal in another. That was the big move. This week is the small one that protects it: once a month, match your books to your bank statement.
Accountants call it “reconciling.” You can call it the five-minute checkup. Either way, it’s the habit that keeps small mistakes from growing into expensive ones.
Why it matters
Your books and your bank account should tell the same story. When they don’t, something happened — and the longer you wait to find out what, the harder it gets.
Here’s what monthly reconciling catches while it’s still small:
- Duplicate charges. A supplier runs your card twice. You won’t notice in March; you’ll definitely feel it when you’re short on a materials run in June.
- Missing money. A client payment you recorded but the bank never received — or one the bank received that you forgot to record. Both happen more than you’d think.
- Fees and surprises. Monthly service charges, an overdraft fee you didn’t expect, a subscription you thought you canceled. The statement doesn’t lie.
- Fraud, early. A charge you don’t recognize is a phone call in month one. Six months later, it’s a police report.
Skip this for a year and “reconciling” becomes a weekend of detective work. Do it monthly and it’s a cup of coffee.
The five-minute routine
Pick a day — the first Monday of the month works — and put it on the calendar as a repeating event. Then:
- Open your bank statement (or just log into online banking and look at last month).
- Walk through each transaction and make sure it’s in your books with the right amount and category.
- Investigate anything that doesn’t match. Don’t just shrug and move on — a mismatch is the whole point of the exercise.
- Note what you found. A one-line note — “duplicate charge from supplier, called 6/3, refunded” — saves future-you a headache.
That’s it. The first time might take twenty minutes. By month three, it’s five.
The trap to watch for
The trap is the “close enough” reconcile — glancing at the ending balance, seeing it’s roughly right, and calling it done. Roughly right is where the duplicate charges hide.
The other trap is doing it at tax time. Reconciling twelve months at once isn’t a habit, it’s an excavation. Future-you, the one trying to file taxes in April, will not thank present-you.
Your one action this week
Reconcile last month. Just September. Open the statement, walk the transactions, fix what doesn’t match. Then set a repeating calendar reminder for the first Monday of every month, so October’s checkup happens on autopilot.
Next week, we’ll deal with the shoebox: what to do about receipts before they fade into mystery charges.
Advantage Bookkeeping Services works with small business owners and entrepreneurs to keep their books tidy and organized, and to understand what trends their financial reports are revealing. You can book a free no obligation consultation here on my website or by clicking this link: https://www.advantagebks.com/lets-go/