Statement of fact

By: Michael Buchmeier

December 13, 2017

As the end of 2017 approaches, it’s a wonderful time to start organizing your financial paperwork and to reconcile your statements for tax season and beyond. Are you a little lost about what to do with your statements or how to reconcile them? We’re here to help get you organized for 2018!

A financial statement is the paper (mailed or available electronically) that shows accounts, banking transactions, and balances during a period of time. Financial institutions are required to send members these monthly or quarterly, depending on the type of shares your account holds. Do you balance your accounts with each statement or do you just ignore and toss them instead? Whatever ends up happening to them, here are some suggestions on how you can put those statements to good use.

Bank reconciliation is used to compare your records to those of your financial institution to see if there are any differences. It is important to balance your records to verify accuracy and to catch unusual transactions caused by fraud or error. Although your account is insured against fraud, the time frame to dispute a debit or ACH transaction is 60 days. Having accurate balances helps prevent problems such as bouncing checks. It tells you how much money you really have and watching your balance may allow you catch a payment that you forgot to record which will in turn avoid a late fee. If you think your balance is incorrect, it will be easier to find the discrepancy if you know that your balance matched the previous month’s statement. When I help members find an error, whether on the credit union end or the member’s, I always look for a matching point to start from. The further back I have to go the more difficult it is.

To reconcile your statement, first verify all the transactions and their amounts. Then take the statement’s ending balance less any outstanding payments (such as checks that haven’t cleared yet) plus any outstanding deposits (which will appear on the next statement). That balance should equal the current balance in your check register plus any interest earned that term.

After you reconcile your statement, you should securely file it for at least 1 year. Statements may be needed for taxes and mortgages. Be sure to shred statements when you are done.

If you are looking to declutter your paperwork in 2018, e-statements may be the way to go for you. Sign up using MidWest America’s Internet Banking and receive an email when your e-statement is available for viewing. E-statements are delivered faster than those sent by mail and are stored in MidWest America’s Internet Banking for whenever you need them.