Bookkeeping and payroll for small businesses across central Virginia.

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Why do my bank statements never match my books?

The most common reason is timing. When you write a check on Tuesday but the recipient doesn’t deposit it until the following week, your books show the expense but your bank doesn’t yet. Same thing with deposits in transit. You recorded the revenue when you made the sale, but the bank doesn’t reflect it until the funds actually clear. These timing differences are normal and will resolve themselves once you properly reconcile.

Missing transactions are the second most common cause. Bank fees, automatic payments, subscription charges, interest credits. Your bank processed them automatically but nobody entered them in your accounting software. A $12 monthly fee doesn’t seem like much until you have six of them across different accounts and suddenly you’re $72 off with no obvious explanation.

Data entry errors cause more problems than most people realize. Transposed numbers are the classic example. You enter $524 when the actual charge was $542. The difference is $18 and you’ll spend an hour looking for an $18 error that doesn’t exist as a single transaction. Wrong amounts, wrong dates, expenses hitting the wrong account. Any mistake in data entry creates a mismatch.

Duplicate entries happen when the same transaction gets recorded twice. This often occurs when you’re entering transactions manually and also have bank feeds importing automatically. QuickBooks and similar software don’t always catch that the check you entered and the check that came through the feed are the same item. Now your books show you paid that vendor twice when you only paid once.

Personal transactions mixed into a business account will throw off your numbers too. If you’re using the same card for both personal and business purchases, those personal items need to be categorized correctly as owner’s draws, not business expenses. Otherwise your expense categories don’t match what the bank actually shows for business costs.

The longer you go without reconciling, the harder it gets to figure out what went wrong. If you reconcile weekly or at least monthly through proper monthly bookkeeping, you catch errors while you still remember what the charges were. Wait six months and you’re trying to remember what that $247 payment was for and why it doesn’t match anything in your records.

When everything is working correctly, your books and bank should match every single month. If they don’t, something in the process is breaking down. A Tri-Cities bookkeeper can usually identify the pattern pretty quickly once they look at your records. Often it’s the same type of error happening repeatedly.

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More Questions

How do I register for Virginia withholding tax?

Register through Virginia Tax's online iReg system. You'll need your federal EIN and basic business information. Registration is free and you'll receive your withholding account number within a few business days.

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What happens if I forgot to collect sales tax from customers?

You still owe the tax to the state whether you collected it or not. The business absorbs the cost out of what would have been profit. Calculate what you owe, file amended returns, and fix your collection process going forward.

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What's the best way to track business expenses?

The best expense tracking system is one you'll actually use consistently. Separate business and personal finances, capture receipts immediately, and reconcile weekly instead of waiting until month-end.

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How do I manage cash flow when customers pay in stages?

Structure deposits to cover your initial costs, invoice the same day you hit milestones, and track billed versus received separately. A cash reserve covers the inevitable gaps between completing work and getting paid.

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I haven't done any bookkeeping since I started my business. Is it too late?

No, it's not too late. Bank and credit card statements can be used to reconstruct your records even if you never tracked anything. The longer you wait, the harder it gets, but catching up is almost always possible.

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What is sales tax nexus and does it apply to me?

Nexus is the connection between your business and a state that requires you to collect sales tax there. Most local service businesses only have Virginia nexus, but if you sell products online or into other states, you may need to collect and remit sales tax elsewhere.

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