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Monthly bank account reconciliations are vital for protecting both your money and your business. A typical statement lists transactions and the bank balance on the front side and includes a reconciliation worksheet on the back. In addition to balancing account totals, the multi-step process helps you identify errors and discrepancies or may point to potential fraudulent activity taking place in your account during the previous month. Understanding how to reconcile a bank statement manually is important even if you normally reconcile accounts electronically.
Complete a Line-Item Comparison
Adjust for Outstanding Amounts
Troubleshooting Reconciliation Errors
Most errors result from incorrectly recording the bank statement balance, missing or incorrectly matching transactions or transposing numbers. However, they can also result from bank statement errors. Review your lists of outstanding transactions and deposits to make sure it includes only unmatched transactions, complete another line item comparison and check your calculations. If the account still doesn’t balance, review the statement with a banking representative to see if the problem lies with your bank.
Based in Green Bay, Wisc., Jackie Lohrey has been writing professionally since 2009. In addition to writing web content and training manuals for small business clients and nonprofit organizations, including ERA Realtors and the Bay Area Humane Society, Lohrey also works as a finance data analyst for a global business outsourcing company.