You’ve finally got a bookkeeper to help keep your books in order. Providing them access to the information they need is a must for them to do their job. Just like most of my clients, you too might feel apprehensive with your bookkeepers accessing your bank statements. I often hear this from my clients; they of course don’t want their banking transactions to be affected and fear that people can access their funds.
As a bookkeeper, we understand the sensitivity of helping you with the heart of your business most effectively. This blog will address the different ways your bookkeeper can access your bank statement without affecting your banking transaction to put at ease your apprehension and fears.
In order for your bookkeeper to reconcile your account, there are three main things that they need for that to happen:
- Transaction
- Bank and credit card statement
- Check images & receipts
Transactions
Transactions have to be categorized for your Checking, Savings, and Credit Card Accounts. We can’t do this unless the transactions are in QuickBooks (QB). When you get your QBO (QuickBooks Online), the first thing you’ll do is to sign in to your bank account and/or credit card financial institution and link it to your QBO. Linking will enable QBO to pull in all transactions. Below are examples of such transactions:
What bookkeepers do is that they categorize these transactions. But sometimes, it’s not always perfect; even though it looks like every transaction is in there, without a bank statement we won’t know if there is anything missing or QBO may categorize transactions incorrectly. That brings us to the second thing that we need: bank statements.
2. Bank Statements
Bank statements are needed to verify that the correct transaction is in there and everything is in your QuickBooks before it is categorized, and we also need the beginning and ending balance in order for us to reconcile your account.
What does reconciliation mean? Investopedia gives us a simple definition:
- It is an accounting process comparing two sets of records to check that figures are correct and in agreement.
- Companies use reconciliation to prevent balance sheet errors on their financial accounts, they check for fraud and they also reconcile the general ledger.
- Accountants follow GAAP (Generally Accepted Accounting Principles); it refers to a common set of accounting principles, standards, and procedures issued by the Financial Accounting Standards Board.
- Public companies in the U.S. must follow GAAP when their accountants compile their financial statements, and so this is what we, at Nave-Bookkeeping, follow when we reconcile accounts.
- GAAP requires double-entry accounting which means each transaction is posted as both a debit and a credit. Reconciliation also confirms that accounts in the general ledger are consistent, accurate, and complete.
The debit and credit balance will be zero. When you do the reconciliation and there’s a discrepancy, a bookkeeper’s job is to find out where this discrepancy lies.
Where do statements come into play?
We need the beginning balance and the ending balance every month in order to match it up with transactions in your QBO and we balance it to zero. Without the monthly bank statements, we won’t know the beginning and ending balance.
Another reason we need the statement is, we have to make sure that everything is in QuickBooks in order for us to categorize it. When your transactions feed into QuickBooks, ideally, it would be a hundred percent correct but that’s not always true because sometimes, transactions don’t always pull into QBO as smoothly as we hope. Our job is to check to make sure that all the transactions are in QBO and add it in accordingly for missing transactions.
If there are any discrepancies, we look into them and make appropriate adjustments. They also check deposits to make sure they are real income and not transfers. When we categorize transactions, this allows us to pull financial statements accurately. This is why we need to check images and copies of receipts to back up our work, which leads to the last item of what we need to reconcile your account.
4. Check images and copies of receipts
The reason why we need check images is because statements only have check numbers, the amount of the check, and the date on when it clears the account, but NO PAYEE.
The check images allow us to verify the details and categorize them accordingly. It’s the same thing with copies of receipts. It will help back up the item categorized. It can also help when you get audited or when your accountant is doing your tax return and wants to reference it.
Now to the point of this blog: How do bookkeepers get access to statements?
This is a touchy point for our clients because many think that we can withdraw or transfer funds out of their accounts. This is not the case. I’ll walk you through a few ways we, as bookkeepers, can access your statements each month so that you can see exactly what we have access to.
Through QBO. In our first example below, there are certain institutions that allow us access to statements through QuickBooks Online. As you can see below, we can access the statements if we click on View Statements.
Once we click on View Statements, it’ll show us all the statements that are fed into QuickBooks as you can see in the next picture below. You can download those transactions and use them to match up the beginning and ending balance, and also check the transactions if check images come with statements. If not, this leads into our next point:
What if statements are not accessible?
QuickBooks will notify us that they cannot import statements from this account as shown below. That happens more often than you think, especially when it comes to credit cards.
There is the option of View Only Access. As the account owner, you log into your financial institution’s website in order to change access. In this example, let’s say you have a Well’s Fargo account—you sign in to your account and go to the Security and Support tab. Most financial institutions’ websites are pretty similar; in this case, it’s the User Account Access Manager as seen below.
Once you’ve clicked on that, you can now see an option to Add a New User, as shown below.
Clicking on that option enables you to put in your bookkeeper’s information, which you can see below.
Once you’ve put the information needed, the next page will have a list of accounts, and access information that is usually on the right-hand side; you can choose and change what you allow your bookkeeper to access.
In this case, there’s only one account that you want to allow your bookkeeper to access. The picture below reflects the View Only access for this one particular account.
Your bookkeeper will now have access to your statement and your checks if they come with statements.
This goes to show that bookkeepers cannot transfer, withdraw, or change the transactions themselves in your bank account. We have access only to your accounts that you allow us access and the rest is blocked.
Some credit card companies and financial institutions don’t allow View Only. So if we can’t access through QuickBooks online or View Only then the third and last resort is to coordinate with the client to download monthly statements and upload them to a secure portal for us to access.
To summarize, in order for your bookkeeper to reconcile your account, the three main things that are needed for that to happen are your TRANSACTIONS, BANK STATEMENTS, and CHECK IMAGES & COPIES OF RECEIPTS.How do we get access to statements? Ideally, QBO would be a great way to get access if your credit card companies and financial institutions allow it. If not, we have the option for a View Only access through your financial institution that you can set up for your bookkeeper.If the first and second option is not available, you upload it to a secure portal and make sure it’s updated monthly.
Conclusion
Ultimately, your bookkeeper’s primary responsibility is making sure all your business’ financials are accounted for and properly organized in your records, and to do that, as their client, you need to provide what is needed. I hope this settles your mind about the safety and security of your money. Know that your bookkeeper is doing everything they can to reconcile your accounts on time every month. If you are looking for a bookkeeper to reconcile and handle your books with the utmost professionalism, Nave Bookkeeping is your go-to! Contact us on our Facebook page Nave Bookkeeping, LLC.
