Of all the small business financial statements, the general ledger is, perhaps, the most important. It is a record of all your company’s financial transactions, recorded as a debit and a credit. When your bookkeeper and financial controller work together at the end of the month in a process called “closing the books,” one of the procedures they complete is making sure the general ledger reconciliation is accurate and it balances. What does that mean? For every transaction, there is an equal and opposite transaction. (It’s actually more complicated than it sounds once you start delving deeper, but that’s why you have your bookkeeper and financial controller at AccountingDepartment.com.)
Completing General Ledger Reconciliation
How is general ledger reconciliation performed? It takes place in 6 steps, performed together by your full-charge bookkeeper and financial controller:
- Know the proper procedures to complete general ledger reconciliation according to company guidelines. For AccountingDepartment.com, these are outlined in your Client Procedures Manual, and they follow GAAP principles of accounting.
- Gather receipts, invoices, account statements and other financial documents to check against the general ledger.
- Analyze the information and accounts. Does anything look unusual? Can everything be explained?
- Document the work to complete the reconciliation.
- Review the work, to be sure the client (that’s you!) understands the financial statements and what they mean.
- Close the books and “lock” the file so it cannot be changed without consent from the financial controller and client.
The general ledger is just one of the small business financial statements your bookkeeper will manage for you when you work with AccountingDepartment.com. Click here to find out more about our daily, weekly and monthly bookkeeping services.