Reconciliations in Puzzle
At Puzzle, we're all about making accounting simpler and more accessible for founders and bookkeepers alike. One of the essential processes we've streamlined is bank and credit card reconciliations. While the term might sound daunting, Puzzle makes reconciliation straightforward, requiring minimal effort and no specialized accounting expertise.
So, What Exactly Is a Reconciliation?
Imagine you're managing your startup, XYZ Corp, offering cutting-edge widget software, and you've had a month of transactions flowing through your bank and credit card accounts. Keeping track of every single transaction and ensuring your books match your actual account activity can seem overwhelming. That's where Puzzle's reconciliation feature comes into play.
Reconciliation is the process of matching the transactions and balances in Puzzle with those on your bank or credit card statements. This ensures that every piece of financial activity is accurately recorded, giving you confidence in your financial reports and peace of mind.
Why Are Reconciliations Important in Puzzle?
We recognized two key challenges:
Data Accuracy: Even with modern bank APIs pulling data directly into Puzzle, occasional discrepancies can occur due to timing differences or data transmission issues.
Financial Confidence: As a founder, you need assurance that your financial statements reflect reality, especially when making critical business decisions or preparing for investor meetings.
By performing regular reconciliations, you:
Validate Completeness: Confirm that all transactions are captured in Puzzle.
Detect Errors Early: Identify and correct any missing or incorrect entries promptly.
Streamline Month-End Close: Make your monthly financial review more efficient.
How Puzzle Simplifies Reconciliations
Traditional bank reconciliations can be tedious and time-consuming. Puzzle transforms this process into a simple checklist item. Here's how:
Direct Data Integration: Puzzle uses bank and credit card APIs to automatically pull your transaction data.
User-Friendly Interface: Our reconciliation tool presents your Puzzle transactions alongside your bank statements for easy comparison.
Minimal Effort Required: Most of the heavy lifting is done for you; just review and confirm the entries.
Performing a Reconciliation in Puzzle: Step-by-Step
Step 1: Select the Account to Reconcile
Navigate to the Reconciliation tab in Puzzle. Choose the bank or credit card account you want to reconcile. You can select an account from the summary at the top or pick from pre-drafted reconciliations below.
Note: You need to reconcile previous periods before moving on to the current one for each account.
Step 2: Upload Your Bank or Credit Card Statement (Optional but Recommended)
While not mandatory, uploading your statement provides a reliable third-party reference. It allows you to see beginning and ending balances side by side with Puzzle's records, ensuring accuracy.
Step 3: Compare Beginning and Ending Balances
Beginning Balance: This should match the ending balance of your last reconciliation. For your first reconciliation, you might need to set this manually.
Ending Balance: Match this with the ending balance on your bank or credit card statement. If there's a difference, don't worry—simply adjust the ending balance in Puzzle to align with your statement.
Why Might There Be Differences?
Timing Differences: Transactions might be pending or posted on different dates due to processing times.
API Discrepancies: Occasionally, data might not sync perfectly due to technical hiccups.
Step 4: Review Transactions
Go through the list of transactions in Puzzle:
Transactions with a Green Checkmark (✓): These are included in the current reconciliation period. Verify that each matches your bank or credit card statement.
Unchecked Transactions: If a transaction should be included, click the circle next to it to add it to the reconciliation.
Missing Transactions?
Check Your Bank Connection: Ensure your account link is active under the Integrations page.
Consider Time Zone Differences: Transactions might appear under different dates due to time zones.
Manually Add Transactions: Use the "+ Add transaction" button to enter any missing items.
Need Help? Reach out to us at [email protected]—we're here to assist!
Step 5: Verify the Remaining Balance
After matching all transactions, the "Remaining" balance should be zero. This means your Puzzle records align perfectly with your bank or credit card activity.
Step 6: Finalize the Reconciliation
Click "Continue" to proceed. You'll see a "Final balance check"—this should also be zero. Confirm everything looks correct, then click "Save & Approve". Congratulations, your reconciliation is complete!
Step 7: Repeat for Each Account
Perform these steps for all your bank and credit card accounts. The reconciliation summary will show the latest status for each, helping you keep track effortlessly.
The Role of Reconciliations in Your Monthly Checklist
At Puzzle, we believe in making month-end closing a breeze. Reconciliations are a key part of our Monthly Checklist, ensuring you don't miss any critical steps in maintaining accurate financial records. By incorporating reconciliations into this checklist, we help you stay organized and focused, with all tasks neatly laid out for you.
Tips and Best Practices
Regular Reviews: Don't wait until the end of the month. Regularly check your transactions to catch any issues early.
Use Memos and Notes: Add descriptions to transactions to make future reviews easier.
Stay Connected: Ensure your bank and credit card integrations remain active for seamless data syncing.
What If I Need to Reopen a Reconciliation?
Mistakes happen, and that's okay! If you need to revisit a completed reconciliation:
Go to the Reconciliation page.
Click on the specific reconciliation you want to review.
Click the three-dot menu (⋮) in the upper-right corner.
Select "Restart reconciliation".
Note: Reopening a reconciliation will also reopen any subsequent reconciliations for that account, so you might need to re-approve those as well.
The Bottom Line
Bank and credit card reconciliations are crucial for ensuring your financial data is accurate and reliable. With Puzzle, we've taken a process that can be tedious and transformed it into a simple, user-friendly experience. By regularly reconciling your accounts, you gain confidence in your financial reports, allowing you to focus on what matters most—growing your business.