Reconciling your bank statement should be done every month when you bank statement arrives in the mail. A reconciliation reviews the income and expenses and compares what the bank has recorded compared with what you have recorded in your checkbook or accounting program. The entire process will help you identify discrepancies, possible bank errors or fraudulent activity that has happened in your account during the month. It will also let you know what transactions you have authorized but have not yet cleared the account, such as uncashed checks.
Familiarize yourself with the sections of the bank statement. You will see a beginning and ending balance, a section for deposits, a section for checks written and an itemization going through the month transaction by transaction.
Add all check register deposits on your calculator for the same period (time frame) of the bank statement. The total deposits in your register should equal the total deposits on your bank statement. Make a note on the statement if they don&#039;t and go through each deposit one by one to locate the discrepancy.
Compare each check recorded in the register against each check noted on the bank statement. Place a check mark next to the check number on your check register to confirm that the bank has cashed the check.
Compare all electronic payments, debit card transactions or ATM withdrawals from the statement against the register. These records often don&#039;t make it into the check register in a timely fashion. Write in any missing ones in the register after you evaluate the transaction to make sure it seems valid--contact your bank immediately if you suspect a transaction that is not yours.
Add all uncashed checks or pending withdrawals together. Make a note on the statement of this total.
Reconcile the balances by taking the ending balance on your bank statement and subtracting all pending withdrawals. The computation should equal zero if all items were properly accounted for in your bank statement and check register.
- Bank statement
- Check register
- Many personal accounting software programs will automatically reconcile your bank statement through online banking. Check with your bank and your software to see if this can be automatically done for you, saving you time.
- The sooner you report discrepancies, the more protection against loss your bank can provide you.
- balancing checkbook image by palms from Fotolia.com