Bank

Reconciliations

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About
this guide

In this guide you will learn

what a bank reconciliation is,

and why it’s so important so
complete in order to close out
the books

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Contents

What is a bank
1 4
reconciliation?

Why are bank reconciliations

2 7
so important?

How is a bank reconciliation

3 9
performed?

How often is a bank

4 9
reconciliation performed?

What are some common

5 9
reasons why you may have
trouble with a bank
reconciliation?

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 1

What is a bank
reconciliation?

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A bank reconciliation
is a matching of
the transactions on your bank
statement to the transactions
in your general ledger

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Information
doesn’t match

$ 2,571 $ 4,924

Bank Statement Accounting Software

Information
matches

$ 2,571 $ 2,571

Bank Statement Accounting Software

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Bank reconciliations are
performed for all BANK
ACCOUNTS as well as all
CREDIT CARDS

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 2

Why are bank

reconciliations
so important?

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 $ 2,571

Bank Statement

Very
Important
With any
company

CASH is KING

You don’t want to take any

chances that your cash
balance is incorrect
This is one of the most important
things to get right!

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If your bank reconciliation
is not completed correctly,
you cannot rely
on the financial
statements to
be CREDIBLE

Bank statements are an absolute requirement

to accurately close out your books

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 3

How is a bank
reconciliation
performed?

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Start by exporting
your bank statement

Your bank statement is the highest form of

credibility to show what your bank balance
was at a certain date

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Enter in the ending bank
balance for the period you
are reconciled

Ensure that the beginning

balance matches too

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Compare the ending
balance between what is
in your accounting
software to what is on
your bank statement

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 4

How often is a
bank reconciliation
performed?

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Bank Reconciliations are most
commonly prepared monthly,
but can be done on a
more frequent basis
with larger organization

Bank statements typically are only available

once a month

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 5

What are some

common reasons
why you may have
trouble with a bank
reconciliation?

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 Missing
Transactions

Duplicate
Transactions

Uncleared
Checks

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It’s important to understand why
you have differences between what
is shown on your accounting
software, and what is shown on
your bank statement

Missing Needs to be fixed

Transactions Enter in missing transactions

Duplicate Needs to be fixed

Transactions Remove duplicate transactions

Uncleared Difference is OK, and should be

Checks monitored

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There can be other reasons for why
you have trouble performing your
bank reconciliation…

Data set can be

very large

Connection to
bank can be poor

Data uploaded may

have been compromised

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 Data set can be
very large

Large data sets make it more challenging to pinpoint

where the difference lies, causing you to go one by one
through transactions

Connection to
bank can be poor

Some transactions may not have synced, or may have

synced incorrectly

Data uploaded may

have been compromised

Often times, the biggest reason for errors is due to

humans! Be careful before you manually upload data to
your accounting software

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Thanks for
reading!
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