Bank Reconciliation

So you may be deciding on taking on a bookkeeper.  The problem is that you don't know how to check the quality of the work otherwise you'd probably do it yourself.  So how do you find someone with the talent you require, and at the same time know they're doing a quality job?

The most important thing to check is whether the new bookkeeper is doing a bank reconciliation.  The bank reconciliation is THE task that needs to be completed each time you want to review the financials.  It ensures that the cash transactions entered in the accounting system is identical to the cash transactions appearing on the bank statement.  What the hell does this mean?  This diagram will assist

For the accounting system to be reliable, the bank reconciliation report must always prove that the cash balance shown on the accounting system is identical to what is shown on the bank statement as illustrated above.  Only then will you know that the data entry has been correct.