In the current world of EFT payments, wire transfers and ATMs some may think that monthly or weekly bank reconciliations are old hat. That is so not true. In fact, reconciling the difference between what is on your books to what is in the banks is actually more difficult especially if your cash inflows and outflows are a crazy mix of checks, ATM withdrawals, debit purchases, wires and EFTs.
I have one client where every transaction is done by check and it is easy to reconcile the account since it only the timing difference between when a check clears that may yield differences. In fact, this practice is probably the most conservative way of accounting because your book balance will probably less because payment is recorded when the check is written — not when it hits the bank.
ATM withdrawals, debit purchases and EFT have to be recorded immediately on the books so that the book balance is kept up to date. Waiting until month-end may really throw off balances and/or you may forget why the withdrawal, debit purchase or wire was made. This may lead to improper booking to the wronf expense account.
The best bet is to monitor electronic banking activity on a weekly basis to make sure that the books are in line with bank balances. Surpises in cash flow are not good even if they are on the plus side. You should have a handle on your cash flow situation at all times. It’s just like checking your wallet!