How to Do Bank Reconciliation

How to Do Bank Reconciliation
1906 Wachovia Bank Statement

Assemble all of the receipts for the month. This includes deposit records, ATM receipts, cash withdrawals, and payments by debit or credit cards that are linked to the account. Remember to include all automatic recurring payments and payments made through online banking services. The account register and the current bank statement are required. Add to this a pen or pencil and a calculator.

Bank Reconciliation Sheet

Compare the entries in the account register to the bank statement. Make note of any discrepancies. Deposits and checks that are written close to the statement date may not appear. Make a list of these items. Compare the receipts with the account register and the bank statement. Make a list of any transaction that has no receipt or that cannot be accounted for. Once every transaction in the account register and on the bank statement is accounted for, note the beginning and ending balances. These will be found on the bank statement.

Old Passbook Account Book

Starting with the ending balance on the bank statement, add in all the deposits that were made but did not appear on the statement. Take a subtotal and note this number. From the subtotal, subtract all checks, debit card, credit card, automatic payments and other withdrawals that are accounted for in the register but are not listed on the bank statement. Compare the results with the balance in the account register. These numbers should be equal. If they are not, there is a problem. Repeat steps one and two making sure that numbers were not transposed in error. This is usually the cause of a discrepancy.

Report any suspicious transactions to the bank immediately. This protects your financial interests and identity. Most often unidentified transactions are oversights and forgotten purchases.

Spreadsheets like Excel can be used to help reduce errors. To set up a spreadsheet, enter the ending balance from the statement into a cell. List all deposits not listed on the bank statement in separate cells. Create a formula to add all the numbers together. List in separate cells all withdrawals from the account that are not reflected on the bank statement. Create a formula to subtract these items from the first subtotal. This amount should equal the balance shown in the account register.