Ensure the accuracy of the data entry process, which involves journal entries of financial transactions and the posting of journal entries to the ledger which can be done by Automated data entry process, cross-checking the first data entries and assimilating a suite of technology-based and manual data entry techniques
The next step towards the accuracy of financial statements is the reconciliation of accounting records with the external records. There are various types of external records, such as supplier invoices, bank statements, and credit card statements etc. You can match the balances indicated by your sheets to the actual bank balance. Similarly, the long-term liability balance should match the total balances on mortgage and other long-term loan documents.
Account reconciliation is another reliable way to ensure the accuracy of your financial statements. We recommend doing this check regularly to ensure that your financial records are accurate.
Scan the Obvious Errors-This is one of the most crucial steps that you can take for financial statement accuracy. You must check the balance sheets for apparent errors, such as negative balance etc. Another area that you can check is the monthly cost of goods sold. As the sales vary every month, it is rare for this cost to be the same every month. Similarly, the fixed assets must have a monthly record in terms of depreciation. These few checks for apparent errors, when done regularly, ensure the accuracy of financial statements.
Follow up with your bookkeeper, store manager or the warehouse supervisor if you spot anomalies. For example, a higher-than-normal inventory balance might be the result of too many obsolete or discontinued items in stock. A high sales return amount may indicate a quality control problem in your manufacturing facility or in your supplier’s facility.
