How do I run a bank reconciliation?

Your bank balance in the system usually does not match the bank statement, and that is normal: a cheque you issued that has not been presented, a transfer that arrived and was not recorded, fees the bank took without notice. The reconciliation is what explains the difference.

Steps

1. Get the month’s bank statement; that is the reference, not your system.
2. Open Accounting → Bank reconciliations — Figure 1 — then New reconciliation.
3. Choose the bank account and the statement date, and enter the balance per bank — Figure 2.
4. The system lists every unreconciled movement on the account. Tick ✓ against each one you find on the statement.
5. What stays unticked is the difference: outstanding cheques or deposits in transit. That is normal and carries to the next month.
6. Anything on the statement but not in your system (fees, interest, an incoming transfer) must first be entered as a document, then come back and tick it.
7. When the difference reaches zero, press Approve.

When to do it

Monthly, as soon as the statement arrives. Putting it off three months turns the difference into a knot that is hard to untie, and you may find in it a mistake a whole quarter old.

Notes

• Do not adjust your balance to match the bank with a vague balancing entry; a difference always has one cause, and it is found by matching, not by hiding.
• A cheque outstanding for more than six months deserves review; usually it was lost or cancelled and never recorded.
• Keep a copy of the bank statement with every approved reconciliation in the electronic archive.