Introduction
Have you ever wondered what your p-card reconciliation is doing? Or, perhaps you’re wondering why everyone else seems so obsessed with it. Well, I’ve got some good news for you: There’s actually a lot more to p-card reconciliation than meets the eye. In this post, we’ll talk about what an “p-card” is (and isn’t) and help explain why reconciling your p-cards is important. We’ll also walk through each step of the process so that when you get to Step 4 (the filing!), your accounting system will be fully up to date and ready for business as usual.
What is a p-card?
A p-card is a card that can be used to pay for business expenses. P-cards are often used for small purchases, such as rent or utility bills, or tax purposes. Starting by learning what is pcard is strongly suggested.
When you use a p-card, it’ll show up on your bank statement as “Purchased at Bank of America.” This shows the amount you spent with them, but doesn’t include any fees associated with using their service (such as ATM withdrawals).
What is everyone else doing?
If you’re like me, you have a lot of friends and family members who use their P-cards. And if you do too, it can be difficult to keep track of the numbers yourself since p-card reconciliation is not required by law or by any major financial institutions.
But what about all those other people out there who aren’t using their cards? Are they doing anything wrong? Are they getting away with something? Or are they just being lazy and not taking advantage of the perks provided by these credit cards (like cashback rewards)?
Why is p-card reconciliation important?
P-card reconciliation is important because it ensures accuracy of your financial records by ensuring that all transactions have been recorded. It also protects you from fraud, allowing you to make sure that all payments were made as planned and in a timely manner. Finally, p-card reconciliation can be used as an audit trail for tax purposes so that reports are complete and accurate.
What are the steps for p-card reconciliation?
- Collect all receipts.
- Compare them to monthly statements.
- Log transactions in your accounting system.
- File all paperwork
Step 1: Collect all receipts.
- Collect all receipts.
- Include all expenses, including travel and meals and entertainment, in your budgeting process by adding them to the appropriate line item on your P-Card reconciliation report (see Step 3).
Step 2: Compare receipts to monthly statements.
Now that you have a better understanding of what is p-card reconciliation, it’s time to begin comparing receipts to monthly statements.
- Check the invoice number, date and description
- Check the total amount of each invoice (including tax)
- Compare your statement with previous months’ invoices
Step 3: Log transactions in your accounting system.
Logging transactions in your accounting system is the third step in reconciling your P-card. You can use any accounting system software that you like to do this, but we recommend using an online service like QuickBooks or Xero if possible because they offer several great features that will make it easier for you to keep track of all of your transactions.
If you don’t have a good method of tracking your expenses and income, then having access to information about those transactions at anytime would be very helpful! This can help prevent errors from occurring later down the road when trying to reconcile them with another person’s P-Card (or vice versa).
Step 4: File all paperwork.
The final step is to file all paperwork. This includes keeping receipts for at least three years, in chronological order and for all expenses. If you don’t have any paperwork, such as a receipt from an online purchase, you can still file the form by writing down the date of purchase and itemized description on the back of your receipt.
P-card reconciliation might be a boring step, but it is important to do
In the world of accountants, p-card reconciliation might be a boring step, but it is important to do. Otherwise you might end up with a lot of money missing and your boss will find out. You could end up in trouble!
Conclusion
P-card reconciliation is a step that you probably take for granted, but it’s one of the most important things you can do to ensure your business is running as efficiently as possible. It’s easy to forget about this step because it doesn’t happen often, but if your business doesn’t have accurate receipts and statements then all of your other accounting processes will be inaccurate too! So make sure that p-card reconciliation happens every month so you can make sure everything else works correctly.