Reconciling is nothing more than
making two or more things compatible. In this sense, reconciling invoices
is, in a nutshell, making all the numbers add up to your business
finances. For many SMEs it is very tedious to carry out this action month
after month, but it is vital to maintain a healthy control of your business
accounting. construction bolts
How is an invoice
reconciliation done?
According to the second set of results of the
study on the demography of businesses, presented by INEGI in March of this
year, “it is estimated that 1,010,857 establishments closed their doors
definitively, representing 20.8%, and 619,443 establishments were born,
representing 12.8% of the country's business population. "
One of the foremost reasons why a
business closes is linked to mismanagement of administration and
accounting. One of the most important actions to avoid this tragic
scenario is to carry out a financial reconciliation of invoices month by month
and, therefore, here we explain how this process is.
The most basic and "old
school" way to make your business income and expenses compatible is to
collect all the tickets and invoices for absolutely all the deposits made to
your account and payments to suppliers, services or purchases made. for your business,
and carefully compare them with your monthly statement looking for everything
to match.
The tedious thing about this process
is that you have to compare, line by line, all the numbers to match your
monthly statement. Some problems are that it is very easy for a receipt to
be lost or the information on paper to be erased, which makes the important
monthly collation difficult.
There are already some digital
alternatives that facilitate the accounting reconciliation of invoices, but
using them implies a constant investment on the part of your business. But
whether you decide to do it manually or using specialized software, knowing the
importance of reconciling invoices can help your business in many ways.
Why is invoice
reconciliation important?
There are many good financial practices that your SME
can do, but within them, the reconciliation of invoices can help you detect
some financial situations that you can solve in good time. Here we share
some benefits of making a continuous reconciliation without having to be an
accountant:
- It allows you greater control of the
performance of your business. Understanding all the inflows and
outflows of money allows you to get a complete picture of the financial
situation of your business. Knowing this landscape is vital to making
better business decisions.
- You can prevent losses. When you detect a
bad financial direction that your SME is heading, you can take immediate
actions to stop them and correct the course.
- You can detect bad movements. Unrecognized
charges are something no one wants to have, but by reconciling invoices,
you can easily spot them and take immediate action with your account
provider to avoid being impaired.
