Bank reconciliation compares your accounting records to your bank statement, line by line, to prove they agree. Enter the statement date and balance, match transactions, resolve differences and finish with a difference of zero.
1What reconciliation is
Reconciling checks that what your books say matches what your bank says. It catches missing, duplicate and incorrect transactions.
2Before you start
Get the statement for the period and make sure all transactions through the statement date are recorded in your books.
3The steps
- Open the reconcile screen for the account
- Enter the statement ending date and balance
- Match each transaction on the statement to your books
- Investigate anything that does not match
- Confirm the difference is zero
- Save the reconciliation report
4When it does not balance
- Check the statement date and balance were entered correctly
- Look for a transaction equal to the difference
- Look for duplicates or swapped digits
- Check transfers that were recorded as income or expenses
- Confirm the opening balance matches the last reconciliation
Never force a balance with an adjustment unless the item is small and fully understood.
5Credit cards and loans
Reconcile credit cards and loans the same way, using their statements.
6Make it monthly
Monthly reconciliation catches problems while they are small. If your accounts have not been reconciled for months, a bookkeeper can review them line by line.
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