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Balancing your Checkbook


The business checkbook is your basic source of information for recording your business expenses. The balance in the business checkbook should match the following:

  • Balance in the cash in Checking Account in the General Ledger at the end of the month
  • Balance in the Bank Account Statement at the end of the month

What is a Check Register?

The first step in balancing your Check Book is keeping your Check Register up to date.

Your Check Register (Physical Book or Bookkeeping Software) probably will have at least six columns:

Number:

The check number.

Date:

The date you made the transaction.

Description:

To whom the check was written, or if you made an ATM withdrawal, or used your debit card.

Amount or Debit:

The exact sum of the check, withdrawal or payment.

Deposit:

This is where you mark down any deposits such as paychecks, money gifts, money transferred from other accounts etc.

Balance:

The actual amount of money that’s in your account. You start with an opening balance (the amount of money you had when you opened the checking account), and gradually, by subtracting all checks, withdrawals, payments, and bank fees, and by adding any deposits or interest payments, you will arrive at your balance for that day.

Steps to a balancing your Checkbook

  • Enter all transactions into your checkbook register each day. This includes ATM withdrawals, online bill payments and debit card purchases.
  • Review your bank account statement and credit card statement as soon as it arrives. Reconcile these monthly statements to your checkbook register, and place a check mark next to all of the items that match.
  • Adjust your checkbook register if necessary. Add or subtract items on your register that appear on your statements but were overlooked when filling in your register.
  • If you find errors, double-check everything. Look for possible typos and human errors made by the bank or your staff.

Once all these steps are followed. your checkbook should have been reconciled.

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