Bank Reconciliation

What is bank reconciliation?

Bank reconciliation is the process of matching the transactions in your bookkeeping records against what your bank statement shows. The goal is to make sure everything lines up—and when it doesn't, to find out why.

Differences can happen for legitimate reasons (like checks that haven't cleared yet) or problems that need attention (like bank errors, missing entries, or fraud).

Why reconcile your bank account?

Regular bank reconciliation helps you:

• Catch errors — Find mistakes in your bookkeeping before they compound
• Detect fraud — Spot unauthorized transactions early
• Track pending transactions — Know which checks haven't cleared
• Verify your cash position — Understand your actual available balance
• Prepare for taxes — Ensure your records are accurate for reporting

How often should you reconcile?

Most small businesses should reconcile at least monthly when bank statements arrive. Businesses with high transaction volumes may benefit from weekly reconciliation. The more frequently you reconcile, the easier it is to find and fix discrepancies.