What other sources have to be reconciled, other than the bank statement?

Every Balance Sheet account should be reconciled on a daily, weekly, or monthly basis (depending on how big/complex your ops are). Let’s break it down…

Assets

• Bank Accounts: self explanatory.
• Accounts Receivable: check your AR Aging. Do you have any severely past due accounts that should be written off? Do you negative line items that indicate that you may have over/under recorded a transaction? Do your records match your clients records?
• Current Assets: if you have prepaid expenses, now is the time to reconcile them against external xls workpapers.
• Fixed Assets (And Depreciation): do your records match what you actually have on hand? Were their spoilages, theft, damages, or changes in fair market value?
• Inventory: do your records match what you actually have on hand? Were their spoilages, theft, damages, or changes in fair market value?

Liabilities

• Accounts Payable: check your AP Aging. Do you have any severely past due accounts that should be written off? Do you negative line items that indicate that you may have over/under recorded a transaction? Do your records match your vendors records?
• Credit Cards: self explanatory.
• Current Liabilities: if you have accrued expenses, now is the time to reconcile them against external xls workpapers.
• Payroll Liabilities: I cannot stress this enough if you have any sort of balance in this account you need to be reconciling on a regular basis. These payments to tax agencies (IRS, FTB, etc) are real, and they want their money on time. Knowing exactly how much you owe every month is critical. I’ve had clients come to us without ever reconciling their Payroll Liabilities and untangling the mess cost thousands and thousands of dollars to unwind. This is a key pitfall feature of Intuit Online Payroll. These sorts of messy reconciliations don’t happen when you’re on Gusto.
• Notes Payable: record and reconcile interest payments
• Equity: match it and reconcile it to the cap table.

Bottom line, the three other accounts (besides bank and CCs) that you should have your eye on when it comes to reconciliations are 1) Payroll Liabilities 2) Accrued Expenses and 3) Prepaid Expenses.** The reason why you want to reconcile these accounts is because the Balance Sheet can be a vehicle to create and hide phantom revenues and expenses. Don’t get caught by surprise; reconcile and verify each account.**