Bank Statement Reconciliation Walkthrough

Compares a bank statement to the business's books for one period, matches what agrees, and flags every transaction that does not.

Tax prep or bookkeepingProfessional Services✓ Checkedv1.0

Before and after

BEFORE · what the owner typed

Input from Molly Blackwood at Robinstead Bookkeeping (phone 330-555-0158): "March rec for Monica Carver, Sagestead Candle Works, 4064 Plumstead Ave, Orchardhaven. Bank begin 8,420.15, bank end 9,130.17. Books begin 8,420.15, books end 9,318.17. Bank: 3/2 rent withdrawal 1,450.00 3/3 deposit 640.00 (Morgan Conway inv 1042) 3/5 check 2211 wax supplier 612.40 3/7 card processor deposit 1,215.50 3/10 utility autopay 187.33 3/12 check 2212 Muriel Desai contractor 450.00 3/14 deposit 380.00 (Myra Ebert inv 1045) 3/18 SQ *MKTG 8842 79.00 3/21 card processor deposit 980.25 3/25 service fee 15.00 3/28 transfer from savings 500.00 3/29 insurance 212.00 Books: 3/2 rent 1,450.00 3/3 Conway inv 1042 640.00 3/5 ck 2211 wax 612.40 3/7 card deposit 1,215.50 3/10 utility 178.33 3/12 ck 2212 Desai 450.00 3/14 Ebert inv 1045 380.00 3/21 card deposit 980.25 3/28 transfer from savings 500.00 3/29 insurance 212.00 3/30 ck 2213 packaging supplier 325.00 3/31 deposit 410.00 (Nadine Fleming inv 1048) Account names: Checking, Rent, Utilities, Supplies, Contract Labor, Insurance, Sales. Ck 2213 and the 3/31 deposit hadn't hit the bank as of the statement."

AFTER · what the skill produced

Summary
Sagestead Candle Works, checking account, March 1 to March 31.
Beginning balances agree: bank 8,420.15 and books 8,420.15.
Bank check: 8,420.15 + deposits 3,715.75 - withdrawals 3,005.73 = 9,130.17. This matches the statement ending balance.
Books check: 8,420.15 + deposits 4,125.75 - withdrawals 3,227.73 = 9,318.17. This matches the books ending balance.
The bank has 12 transactions. 9 match exactly. 3 bank items are flagged. 2 book items are not yet in the bank. That is 5 flagged items in all.

Flagged items
In the bank but not in the books:

3/18, SQ *MKTG 8842, 79.00 withdrawal. Nothing in the books matches this. Cause unknown.
3/25, service fee, 15.00 withdrawal. Not recorded in the books.

In both, but the amounts differ:

3/10, utility autopay. The bank shows 187.33 and the books show 178.33. The books are 9.00 too low. This looks like swapped digits, so check it against the utility bill.

In the books but not in the bank:

3/30, check 2213 to the packaging supplier, 325.00. Recorded in the books, not yet cashed per your notes (outstanding check).
3/31, deposit of 410.00 from Nadine Fleming, invoice 1048. Recorded in the books, not yet on the statement per your notes (deposit in transit).

Proof
Bank side: 9,130.17 + 410.00 deposit in transit - 325.00 outstanding check = 9,215.17 adjusted bank balance.
Books side: 9,318.17 - 9.00 utility correction - 79.00 marketing charge - 15.00 service fee = 9,215.17 adjusted books balance.
The two adjusted balances agree. This assumes the 79.00 charge is a real business expense, which still needs to be confirmed.

Entries to review

Utilities: change the 3/10 entry from 178.33 to 187.33, a 9.00 increase, once the bill is checked.
3/25 service fee, 15.00: needs an account. No account for bank fees was given.
3/18 charge, 79.00: hold until the owner confirms what it is. No account assigned yet.
Check 2213 and the 3/31 deposit stay as they are. Confirm both appear on the April statement.

Questions for the owner

What is the 79.00 charge from "SQ *MKTG 8842" on 3/18, and was it authorized by Monica Carver?
Which account should the 15.00 service fee go to, since no bank fee account was listed?
Does the utility bill for March show 187.33?
Which account should the 79.00 charge go to once it is confirmed?
Did check 2213 and the 410.00 deposit clear in April? Please call Molly Blackwood at 330-555-0158 once the April statement is in.

What it does

Compares a bank statement to the business's books for one period, matches what agrees, and flags every transaction that does not. It then proves the two balances tie out, or shows what is still unexplained.

Use it when: Use when a bookkeeper or small business owner needs to reconcile a bank statement against the books and find unmatched transactions, such as: reconcile this month, why doesn't my bank balance match, find what's missing, or walk me through the bank rec.