There are two main reasons to automate your bank reconciliation process. The first is that you will save time and speed up the overall process by eliminating the need to manually check via API/statement for every single transaction. Secondly, automating reconciling processes minimizes human error and creates a more accurate data source to get you into a positive direction towards financial goals.

Manual bank reconciliation is a thing of the past

A bank reconciliation is the process of reviewing all of your financial records to make sure they match with the transactions that are recorded in your bank statement. This is done at the end of every month, or at any other time when your bank account balance has experienced a significant change. A lot of people hate reconciling their bank accounts. To do it manually, you'll need to look through all of your financial statements (credit card statements, checks that you've written, etc.) and then enter each transaction into your accounting software. A lot can go wrong here. Maybe you'll miss an expense because you didn't write it down correctly, or maybe you'll have a typo somewhere in your transaction list. Whatever the reason, these little mistakes will happen. And if you're reconciling by hand, it's likely that they'll happen often enough that they'll throw off the whole process.

Automated bank reconciliation is essential in a scalable business environment

The benefits of automating bank reconciliation outweigh the cost of online services providing the tools by a long way:

Speed: Automated reconciliation can be done in minutes instead of hours or days.

Accuracy: Reconciliation errors are common; automated systems are less prone to mistakes.

Scalability: The more money you have flowing through your bank account, the harder manual reconciliation becomes.

Having an automated system in place means that you'll never need to do manual reconciliations as your company grows.

The most common way to automate reconciliation is through an online banking service like Squeegee, Xero or Quickbooks Online (QBO). These services give you real-time access to bank accounts so you can see what's happening on a day-to-day basis. You can even set up daily or weekly reports that will let you know if anything looks out of place.