Bank reconciliation

Glossary / Bank reconciliation · Also called reconciling, bank rec

How it works

You start with the statement's ending balance and the transactions in your books for that account. Tick each deposit and payment that appears on the statement. Whatever is left unticked should be items the bank has not processed yet. If the ticked items plus the opening balance equal the statement balance, the account is reconciled.

Most differences come from a few causes: a bank fee or interest not entered, a transaction entered twice, a typo in an amount, or a payment recorded in the wrong account. Reconcile credit card accounts the same way, against the card statement.

Worked example: Explaining a difference

The June 30 statement shows a balance of $8,420. The books show $7,915. Cheque 1187 for $650 has not cleared, a $150 deposit made on June 30 is not on the statement, and a $15 monthly bank fee was never entered.

Enter the $15 fee and the books show $7,900. Then $7,900 + $650 outstanding cheque - $150 deposit in transit = $8,400. That leaves $20 still unexplained, which turns out to be a deposit typed as $230 instead of $250. Fix it and the difference is $0.00.

In AcboBooks

Reconcile works for bank and credit card accounts: enter the statement date and ending balance, tick cleared deposits and cheques, and finish when the difference is $0.00. Lines already cleared through a statement import come in ticked. Past reconciliations are listed with a report you can save as PDF, and any one can be undone.

Related terms

• Closing the books
• Undeposited funds
• General ledger (GL)
• Audit trail
• Petty cash

Related on this site

• Bank reconciliation software
• How to reconcile a bank account
• Monthly closing checklist

Updated October 25, 2026. General information, not tax, legal or accounting advice. Rules and rates change; check with the IRS, the CRA, your state or province, or your accountant.

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