The Right Way to Reconcile Your Books

Think reconciling your books is just a boring monthly to-do? Think again.

 

In this episode, we’re diving deep into why reconciliation matters so much more than you think and how skipping this step can quietly sabotage your strategy, reporting, and confidence.

 

If you’ve ever looked at your bank balance and QuickBooks total and thought, “Uh…those don’t match,” this one’s for you. I’m sharing how reconciliation works, when to do it, and the costly mistakes it helps you avoid.

 

Whether you’re DIY-ing your books or outsourcing to a pro, this episode is a must-listen for every creative CEO who wants clean data, confident decisions, and full financial clarity.

 

In this episode, we cover:

✅ What reconciliation actually means and why it matters

✅ Common errors that mess up your reports (and how to catch them)

✅ Why unreconciled books lead to tax and decision-making drama

✅ How to reconcile your books step-by-step each month

✅ When it’s time to stop DIY-ing and bring in support

 

If your financial data is messy or you’re second-guessing the numbers, this episode will help you get back on solid ground and lead with clarity.

 

🎧 Hit play now and learn how to keep your books squeaky clean, accurate, and decision-ready month after month.

 

🔗 Resources & Links

Website: https://www.firestormfinance.com/

Instagram: https://www.instagram.com/firestormfinance/

Threads: https://www.threads.net/@firestormfinance?hl=en

LinkedIn: https://www.linkedin.com/in/samantha-e-8796b6176/

Newsletter: https://firestormfinance.myflodesk.com/ajmiv1kyt1

📝 Want to see a specific topic or guest on the show? Submit your suggestion here!

 

📢 If this episode gave you a little “Oof, I needed that” moment send it to a friend, leave a review, and help more creatives build clean, confident, strategy-ready finances.

Episode Transcript

samantha-eck_2_02-20-2025_120206: Welcome to the Creative Minds Smart (00:01):
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Money Podcast, where we turn financialconfusion into creative confidence.
I'm Samantha Eck, bookkeeper andfractional CFO for creative entrepreneurs.
Each week I'm sharing myfinancial expertise and actionable
strategies to help you builda thriving creative business.
Plus, you'll hear from industry expertswho bring fresh perspectives on growing

(00:23):
your business beyond the numbers.
Because building a successfulcreative business starts with
strong financial foundations.
Your next chapter starts now.
You are listening to the CreativeMinds Smart Money Podcast, and today's
topic is all about reconciling.
And I know reconciling sounds likesomething your accountant would a

(00:46):
say in their sleep, but if your booksaren't reconciling, you could be
making decisions on the wrong data.
So we wanna discuss the importance of itand how we can go ahead and do it, and.
Everything in between whenit comes to reconciling.
So let's get right into it todayand dive into today's topic.

(01:09):
It's gonna be a little bit of ashorter episode than have been in the
past few weeks, but I'm very excitedto really dig in and talk about it.
So first of all, we wanna askourselves, what is reconciliation?
Because reconciliationsounds like a big word.
People are like, Ooh, I don'tknow what reconciliation is.
It's a hard word to spell.

(01:29):
I know many people who still can'tspell reconciliation properly.
So let's really talk about what it is.
So reconciliation is matchingyour books to your bank account.
And you would be like, okay, Samantha,don't I do that already when I
accept transactions in QuickBooksor when I, just attach my bank

(01:49):
account to QuickBooks, but you don't,reconciliation is so much more than that.
And you would be surprised at thenumber of clients I've talked to who
have told me that they have reconciledtheir books up to current and I go
into their books and they haven'tbeen reconciled for three years.
So that's where we have a lot of.
Different issues and when you see adifference in your bank balance versus

(02:15):
what is in your accounting software,that is usually something to do with some
sort or form of reconciliation error.
It makes sure that every transactionthat we have in our bank account is
accounted for and is accurate becausethe data in our bank account, yes,
that's where we have all of ourfinancial data, but when we port it

(02:37):
over to QuickBooks, that's where we'reputting all of the categorizations.
That's where we're reallyfinally starting to use that
data to make strategic decisions.
So we wanna make sure that it isaccounted for and it's accurate.
And then of course reconciliation isgonna help us catch those duplicates,
catch any errors, or catch fraud early.

(02:57):
So for example, if you are someonewho goes on business trips regularly
and you see a Southwest Airlinescharge that you don't recognize.
It could help you catch maybe someoneelse is using your card to go on a
business trip with Southwest Airlines.
So now you can catch that andreport it and hopefully get

(03:18):
your money back from them.
Okay, so now you're like, okay, Samantha,you've explained what reconciliation
is, but what happens when I don't do it?
Like what is the point?
First of all, if you don'treconcile, you're gonna have
inaccurate profit reports.
And what I mean by this is becausea lot of the times you could be
double recording income if you havea connection, let's say with Square.

(03:41):
Or Stripe or just some sort of paymentprocessor where you have income coming
in and sometimes QuickBooks doesnot match them within the bank feed.
Like sometimes they don't.
There are times they do, but I've seenit so many times where they don't, or a
transfer, they don't match a transfer,they don't match a credit card payment.
Something like that where it has theamount in the bank account looking higher

(04:05):
than what's actually in the bank account.
That's where we can end upactually double recording income,
double recording payments overreporting our bank accounts so it.
Leaves a lot of inaccuraciesand we wanna make sure that
those inaccuracies aren't there.
It can also lead tomisleading tax estimates.
So if you have a receipt software likeHubdoc or something like that and you

(04:26):
send receipts, but you also acceptedthe transaction in the bank feed and
didn't match it to that receipt, youhave now double recorded an expense.
So now that expense is showing up twice.
Come.
Your quarterly estimatedtaxes come tax season, you're
recording that expense twice.
So now you have double the expenses.
You're paying less than taxes,but if someone were to audit

(04:47):
you, like that's a big red flag.
It also leaves a disorganized audittrail, so that does become a really
big problem if you're ever audited orif you're applying for loans because
the people who are looking at yourfile don't actually know if it's
accurate or not, because now you don'thave any sort of reconciled numbers.

(05:07):
A lot of people don't.
Reconciled because they justdon't think it's so important.
But again, this is exactly why.
And then of course you're gonna get somesort of decision making fatigue from
second guessing your numbers, becausewithout having them reconciled and knowing
if everything is accurate in there, you'regonna feel a little bit on shaky ground.
So you wanna make sure that youare getting those reconciled.

(05:29):
So when and how?
Do we reconcile our books?
So first of all, monthlyis the gold standard.
Any more than that in your kind of markmicromanaging your accounts and any less
than that, and you're just missing it.
So what does reconcilinglook like on a monthly basis?
So first of all, log intoyour bank account, your credit
cards, your payment processors.

(05:50):
Whatever it is that you can verify thatwhat's coming into your bank account can
actually come into your bank account.
So for example, with Square, if yougo to, I believe transfers, it'll show
you all the money that they've sentto your account throughout the month,
less fees, so you can understand howthe split was, everything like that.
You should have been doing thiswhen you're categorizing, but now

(06:12):
you can understand, okay, I seeall of these payments are there.
They've all come into my bank account.
They're good.
Same thing with your bank.
You can just go through andmake sure everything is there.
Then you wanna go ahead and matchyour transactions and your bookkeeping
software, whether it is QuickBooks,zero Wave, Zoho books, all of them
will allow you to reconcile your books.

(06:33):
It is very important that even ifthey say that everything matches.
So QuickBooks does this, zero,does this wave, does this.
Even if they say that everything matchesin your books, that you go transaction
by transaction and make sure they'reall there and they're all correct and
they're all perfectly categorized.
Especially if you don't have a bookkeeper.
This is your QC moment.

(06:54):
You wanna make sure that thequality is there and you wanna catch
anything that might be a red flag.
Then you wanna, flag anyunknown charges or duplicates.
So if you see any duplicates, maybe you.
It didn't match a transferfrom an account to an account.
You wanna make sure that you lookat that and say, okay, well I need
to undo this one so I can match itto the correct account just to make

(07:18):
sure that everything looks good.
And then once you confirm yourbalances match, that's when you
know you've done everything right.
And that's when you can investigate allof those ones that are left over and ask
yourself, okay, well why are they there?
For example, if you purchased a printeron a personal card and you just put
that to your main bank account, that isgoing to reflect as in overage there.

(07:42):
It shouldn't be reflected in yourmain bank account, right, because
you purchased it on a personal card.
That should actually be a journal entrythat either you or your bookkeeper does
from the expense account to ownership.
Uh, distribution.
So you need to make sure thatthose aren't kind of being
recorded in the incorrect places.
And I know you might be thinking,well, that makes sense Samantha.
Like, who would do that?

(08:03):
I promise you I've seen it all.
I'm not judging you.
Like I always tell my clients,let's not dwell on it.
Let's fix it and make sure thatit's done properly moving forward.
So that is how you reconcile.
Again, you wanna do that monthlyand make sure that everything looks
good so that you can make sure thatyou're working on accurate data.
So, of course you can do this yourself.

(08:25):
It's totally fine to do it yourself.
There's no reason that you can't do it.
Your spouse self, especially whenyou're first starting out and you only
have like five transactions a month,or you have 25 transactions a month.
When you wanna bring in help,I think is when you're starts
to get really overwhelming.
Because like I said, you wanna doublecheck every single line, and this is
a really good quality check thing.
You don't just wanna go through andbe like, oh yes, everything is good.

(08:47):
All the amounts match up.
Okay, I'm done reconciling.
You actually wanna go line by line andmake sure that everything matches and make
sure that everything looks good, becauseoccasionally as well, it's a timing issue.
So not everything that's in a givenmonth might actually clear during
that month, if that makes sense.
It might not clear untilthe next statement, period.
So you wanna make sure that,that you're catching that.

(09:10):
And I have seen credit cards andpeople that have credit cards that
have had over 500 transactions.
So that's when it becomes reallyoverwhelming because , a 500
transaction reconciliation can takea half hour instead of 15 minutes.
It can take three hours sometimes,especially if it's super messy.
It just depends on who you're workingwith and how overwhelming that can be.

(09:32):
So I wanna remind you that your financialdata or your financial strategy is only
as good as the data it's based on and.
You wanna make sure that you'rereconciling because it's not just
responsible, but it's radical leadership.
You wanna let your numbers tell thetruth so that you can write the next
chapter of your business with success.

(09:53):
As always, if you guys enjoyed thisepisode, please like it, comment.
Share it with a friend.
Get out there on social media, sharethis episode with people and let
them know that we're here so thatthey can also enjoy these episodes.
If you guys are looking for moretopics that you want me to talk
about, please fill out the formof the description box below.
This is not for guests anymore.

(10:15):
I will not be accepting guests asof the end of this year because I
have noticed that you guys really doenjoy listening to me talk to myself.
So I'm very excited to get into morefinance topics and really help you guys.
Dig into those topics.
I'm just so overjoyed that you guysenjoy spending time with me and that
I get to really do something that Ilove, which is podcasting and connect

(10:39):
with you guys on a deeper level.
As always, I wish you the best weekever and we'll see you next week.
Farewell fellow travelers.