bank-reconciliation

Bank Reconciliation

Reconcile every bank account and corporate credit card each month. Match bank transactions to the general ledger, resolve discrepancies, track uncleared items, and ensure the books reflect reality. Goal: the GL cash balance always ties to the bank.

Purpose

Bank reconciliation is the most fundamental financial control — it catches fraud, bank errors, and data entry mistakes before they compound. An unreconciled GL means the company doesn't actually know how much cash it has. This skill ensures every account ties to the bank statement every month, with full documentation of timing differences and adjustments.

When to Use

• "Reconcile the bank accounts"
• "Match these transactions"
• "Why doesn't the GL cash balance match the bank?"
• "Reconcile corporate cards"
• "Month-end bank reconciliation"

Inputs Required

1. Bank statement — full transaction history for the period (CSV, PDF, or API).
2. GL cash account detail — from ledger-management.
3. AP and AR subledgers — for vendor payment and customer receipt matching.
4. Prior month reconciliation — the ending reconciled balance becomes this month's starting point.

Quick Reference

Reconciling Item	Treatment	Example
Deposits in transit	Add to bank balance	Customer check deposited but not cleared
Outstanding checks	Deduct from bank balance	Check issued but not yet cashed
Bank fees not yet recorded	Record in GL	Monthly maintenance fee, wire fee
Interest income not yet recorded	Record in GL	Interest earned on account balance
ACH settlements in flight	Track, should clear in 1-3 days	Payroll sent but not debited
Bank errors	Dispute with bank immediately	Wrong amount debited/credited

Procedure

1. Start with Prior Reconciliation

Beginning book balance = Prior month reconciled ending balance
Beginning bank balance = Prior month reconciled ending balance (they should match)

If the prior month didn't tie, start by resolving last month's outstanding items FIRST.