Bob Gauvreau explains why reconciliation is the first step in taking over a business's finances. If your books aren't fully reconciled, every number downstream is unreliable. Get that right before you trust anything else.
If a business handed its numbers to someone new every month, what's the first thing you'd want that person to check? So if a business owner were to hand over numbers to a new person every month, the first thing that person should review is whether or not everything is reconciled. The reconciliation process inside the books, inside the numbers, is the check to make sure that everything is complete and accurate and up to date. If it's not reconciled, there's an opportunity for missed expenses, Which means that the information is not reliable, likely not accurate. And that's a really great starting point. If that's taken place, then you just have to worry about whether the numbers are in the right spot.
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