Bank Reconciliation Statement
Reconciles your cash book to the bank statement and shows the difference.
Details
reconciling bank statementsUploads
Your logo
A photo or picture
Goes on this page only. Drag it anywhere and pull its corner to resize it.
Your signature
Draw it with a finger, a mouse or a trackpad, and it goes on the page like a picture.
Pictures and signatures stay on this device. Nothing is uploaded to a server.
Red highlights mark what is still blank. Click anything on the page to change it. Your draft is kept on this device as you work.
This sheet is a working document. If you are redoing it every month, ledger software does the reconciliation for you and keeps the audit trail — that is the part a template cannot do.
As at [date]
| Per bank statement | |
|---|---|
| Balance per bank statement | $ 0.00 |
| Less unpresented: None | |
| Add deposit in transit: None | |
| Adjusted bank balance | $ 0.00 |
| Per cash book | |
|---|---|
| Balance per cash book | $ 0.00 |
| Less charges / interest: None | |
| Adjusted cash book balance | $ 0.00 |
The account reconciles. Both adjusted balances agree at $ 0.00.
What is a Bank Reconciliation?
A bank reconciliation statement compares the cash balance in your books with the balance on the bank statement and explains every difference — cheques not yet presented, deposits in transit, charges and interest you had not recorded. The two figures should agree. When they do not, the gap is either a timing difference you can name or an error, a duplicate or a fraud you have not found yet.
Bookkeepers do this monthly for every bank account, card account and payment processor. Treasurers of clubs and charities do it before every committee meeting. Accountants do it before signing anything off, auditors sample it as a control test, and anyone taking over a set of books does it first, because until the bank agrees with your ledger you do not know what any other report is worth. It is also the standard check after a system migration.
The arithmetic is universal; what is expected around it is not. Listed companies in the US document reconciliation as an internal control under section 404 of Sarbanes-Oxley, charity regulators such as the Charity Commission in England and Wales and the ACNC in Australia expect trustees to see reconciled figures, and statutory audit requirements under India's Companies Act set their own expectations. Cheque staling periods differ by country and by bank, so an old unpresented cheque should be investigated rather than carried forward.
A reconciliation proves two records describe the same set of transactions. It does not prove those transactions were legitimate, authorised or correctly coded: a payment to a fictitious supplier reconciles perfectly, because it appears in both places. It is not a cash flow statement and not a substitute for the bank statement — it is the bridge between them. And one that balances only because somebody posted an adjustment to make it balance hides exactly what you needed to find.
What to put in a Bank Reconciliation
These are the details this template asks for. Anything left blank is marked in red on the preview so you can see what is still missing.
| Field | What goes in it |
|---|---|
| Business name | For example: Barton Supply Co. |
| Your address | For example: Unit 7, Barton Road, Columbus, OH 43212 |
| Period to | Free text |
| Balance per bank statement | For example: 18420.55 |
| Balance per cash book | For example: 17992.30 |
| Unpresented payments | One per line: Reference | Amount |
| Deposits not yet credited | One per line: Reference | Amount |
| Bank charges / interest not in cash book optional | One per line: Reference | Amount |
How to write a Bank Reconciliation
Fix the period and both closing balances
Write the account name, the last four digits, the period covered, the closing balance per the bank statement and the closing balance per your cash book. Both must be as at the same date. Reconciling a month-end ledger to a statement running to the 28th is the most common reason a reconciliation will not resolve, and it wastes an afternoon before anyone notices.
Match the two records line by line
Work down the bank statement ticking each entry against your cash book, then work down the cash book the other way. Match on amount and date together, not amount alone — two payments of the same value in one week are easy to cross-tick, leaving two genuine differences that cancel out and hide each other. What is left unticked is your reconciling items.
List unpresented cheques and deposits in transit
These are your timing differences: cheques written and posted that the bank has not paid, and receipts banked after the statement cut-off. List each with its date, reference and amount rather than as one total, because next month you need to see which cleared. Anything still on the list after two or three months is not timing, it is a problem.
Post the bank-only items into your books
Charges, interest, standing orders, direct debits, returned payments, card settlement fees and exchange differences usually appear on the statement before they reach your ledger. These are not reconciling items to carry forward — they are entries you are missing, so post them. Only genuine timing differences belong on the reconciliation itself.
Prove it, then investigate the rest
Start with the bank closing balance, add deposits in transit, subtract unpresented cheques, and the result should equal your adjusted cash book balance. If it does not, look for a transposed figure — a difference divisible by nine often is — a payment entered twice, or an amount entered on the wrong side. Do not force it with a balancing journal.
Common mistakes
- Reconciling to a statement with a different cut-off date than your ledger produces a difference no amount of ticking will resolve, and hours are lost before anyone checks the dates.
- Posting a suspense or adjustment journal to make the reconciliation balance conceals the actual error, which compounds every month until someone has to unpick a year of entries.
- Carrying the same unpresented cheque forward month after month overstates creditors and understates cash, and eventually the cheque goes stale and the payment has to be made again.
- Ticking on amount alone rather than amount and date lets two errors of equal value cancel each other out, so the reconciliation balances while both entries remain wrong.
- Treating a completed reconciliation as proof that spending was legitimate misses payments properly recorded in both places that should never have been made at all.
Frequently asked questions
How do you reconcile a bank statement?
Take the closing balance on the statement, add money banked that has not cleared, subtract payments the bank has not yet paid out, and compare the result to your cash book balance after posting any charges, interest or direct debits you had not recorded. If the two agree, it reconciles. If not, the difference is an error to find.
What causes a difference between the cash book and the bank statement?
Four things. Timing, where one side has recorded something the other has not processed. Bank-only items such as charges, interest or returned payments you had not entered. Errors, including transposed digits, duplicates and entries on the wrong side. And, occasionally, unauthorised transactions. Timing differences resolve themselves next period; the other three do not.
How often should a bank reconciliation be done?
Monthly is the normal minimum, and many businesses reconcile weekly or daily where the account is busy or fraud exposure is a concern. The value comes from doing it often enough that a difference is still traceable — the same unexplained £280 is a ten-minute job in a week of entries and an afternoon in a quarter of them.
What is an unpresented cheque?
A cheque you have written, recorded and sent, but which the recipient has not paid in or the bank has not cleared. Your books show the money gone; the statement does not. It is a genuine timing difference in the month it arises, but one that stays on the list for months usually means the cheque was lost or never sent.
Does a reconciled account mean the books are correct?
No. It means your ledger and the bank agree on which transactions happened and for how much. It says nothing about whether each was authorised, correctly coded to the right expense account, or supported by an invoice. Reconciliation is one control among several, not a clean bill of health for the accounts.
This page explains general practice and is not legal advice. Requirements differ between countries and, in some cases, between states — check what applies where the document will be used.