How to reconcile your bank account in 15 minutes
“Reconcile your bank account” sounds like something only an accountant does. It isn't. Reconciling just means checking that the money your books say you have matches the money your bank says you have. When the two agree, you can trust your numbers. When they don't, you find out why while the problem is still small.
If you do it once a month, it usually takes about fifteen minutes. Here is a simple routine you can follow.
Why bother?
Your bookkeeping is only as good as the transactions in it. A missed charge, a deposit entered twice, or a transaction filed in the wrong month can quietly throw off your profit, your tax numbers, and your sense of how much cash you really have. Reconciling is the habit that catches those mistakes. It also helps you spot things you'd want to know about anyway: a subscription you forgot to cancel, a bank fee you didn't expect, or a charge you don't recognize.
What you need
- Your bank statement for the month (a PDF from online banking is fine).
- Your books for the same account and the same dates.
- Fifteen quiet minutes and something to drink.
Step 1: Start with the ending balance (2 minutes)
Look at the last page of your statement and find the ending balance. Then look up the balance of that same account in your books as of the statement's last day. Write both numbers down.
If they match, congratulations: you are almost done. If they don't, the difference is your clue. Keep that number handy, because it often points straight at the problem. A difference of exactly $49.99, for example, is probably one missing transaction of $49.99.
Step 2: Account for timing (3 minutes)
Some differences aren't mistakes at all. They're just timing:
- Checks you wrote that haven't been cashed yet. Your books show the money gone; the bank doesn't yet.
- Deposits in transit. You recorded a deposit on the 31st, but the bank posted it on the 2nd.
- Pending card charges. Some banks include pending charges in the balance you see online; your statement usually doesn't.
List these items. Add them to (or subtract them from) the bank balance and see whether the gap closes. Often it does.
Step 3: Tick through the transactions (7 minutes)
If there's still a difference, go line by line. For each transaction on the statement, find the matching line in your books and mark it. Work from the biggest amounts to the smallest, because big items are faster to find and more likely to matter.
Look for these common culprits:
- Missing transactions: on the statement but not in your books. Bank fees and interest are the usual suspects.
- Duplicates: the same payment entered twice, often once by hand and once from an import.
- Typos: $1,250 entered as $1,520. If your difference divides evenly by 9, two digits were probably swapped.
- Wrong account: a charge recorded against your savings account instead of checking.
Step 4: Fix and write a note (3 minutes)
Correct whatever you found: add the missing fee, delete the duplicate, fix the typo. Then write a one-line note about anything unusual, such as “$300 deposit on the 30th is a customer payment for invoice 1042; bank posted it on the 2nd.” Future you, and your accountant, will be grateful.
When the adjusted balances match, you're done for the month.
Tips that make it easier
- Pick a day and stick to it. The first weekday after your statement arrives works well.
- Don't let months stack up. One month takes fifteen minutes. Six months at once can take an afternoon, and the trail goes cold.
- Use a bank feed. When transactions flow in from your bank automatically, there's far less typing, so there are far fewer typos and missing items to chase.
- Reconcile your credit cards too. The same routine works for any account with a statement.
When to ask for help
If you've been through every line and a difference won't go away, or your books haven't been reconciled for a long time, it's worth an hour of a bookkeeper's time to get a clean starting point. After that, the monthly routine keeps it clean.
How Apsis helps
Apsis pulls transactions from your bank every morning, so most of the matching is done before you sit down. The reconciliation screen lists what's still pending at the bank in one summary, and when everything lines up, your Home screen tells you your books match your bank. If you'd like to try it, start a free 30-day trial.