Performing account reconciliations is a tedious task for most small-business owners, but a necessary task nonetheless. When you perform account reconciliations, the goal is to ensure all transactions you process through your business bank account are properly accounted for. You reconcile, or match, the items on your bank statement to items you record in your company books. Once you reconcile your accounts, the adjusted statement balance and adjusted book balance should match. The reconciliation process creates a paper trail and is helpful in explaining income and expenses, or providing evidence in the event of an external or internal audit. Account reconciliations are typically performed on a monthly basis.
Things You Will Need
Recent bank statement
Look at the ending balance on your bank statement.
Total any deposits you have made between the date the statement ends and the date you perform the reconciliation. Add the deposit total to your ending bank statement balance.
Total any outstanding checks that have been issued but have not cleared the bank between the ending statement date and the reconciliation date. Subtract the total outstanding checks from the ending statement balance. The result is your adjusted statement balance.
Add or subtract any bank errors, if applicable. If your bank posts an erroneous transaction to your account between the statement and reconciliation dates, adjust your ending statement balance accordingly. For example, if your bank posts a deposit that is an incorrect amount, add or subtract the difference from your adjusted statement balance.
Look at the balance recorded in your checking account register or books on the date of reconciliation.
Deduct bank fees that appear on your bank statement but have not been recorded in your books, such as non-sufficient funds (NSF) fees, check printing fees and services charges.
Add interest the bank deposits to your account at the end of the statement cycle if you have not recorded the deposit on the books. The interest you earn is shown on your bank statement.
Add or subtract any miscellaneous items shown on your bank statement but not reflected on the books. Review transactions on the bank statement. If deposits or withdrawals recorded on the statement are not shown on the books, adjust accordingly. The result is your adjusted book balance. Verify that your adjusted statement and book balances match. If they do not, you must perform the reconciliation again. If the figures match, your account is reconciled.