What is a bank reconciliation?
It is a check that compares your accounting records with your bank statement to confirm both agree. Any difference is investigated and explained.
Why do it every month?
- It finds mistakes and duplicate entries early
- It spots payments you did not authorise
- It shows the true cash balance you can rely on
- It keeps your books ready for tax filing and audit
Common reasons for differences
- Timing: a cheque or transfer you recorded has not yet cleared the bank
- Bank charges: fees that are on the statement but not yet in your books
- Entry errors: deposits recorded twice, not at all, or with swapped digits
How to do it
- Start with the closing balance on the bank statement.
- Tick off each transaction that appears in both your books and the statement.
- List the items that appear in only one place.
- Adjust for timing items and record any missing entries in your books.
- Confirm that the adjusted balances match. If they do not, keep investigating.
Our team reconciles every bank account each month and explains every difference, not just the total.
Need help with this? Our Bank Reconciliation service is handled by our team, with a weekly update meeting. Book a consultation
