Glossary
What is bank reconciliation?
What bank reconciliation means, the usual reasons books and statement differ, and a worked reconciliation for one month.
Updated
In short
Bank reconciliation matches the bank balance in your books with the bank statement and explains each difference. In SimpleERP you tick cleared lines in the bank register until the difference is zero.
Bank reconciliation is the check that the bank account in your books agrees with the bank's statement on a date. Differences come from timing, such as cheques issued but not yet presented or deposits not yet credited, and from entries missing in the books, such as bank charges or interest. Every difference is explained, and missing entries are posted.
Bank reconciliation: a worked example
On 31 October 2026 Harbour Steel Furniture's bank statement shows $64,700. After posting $50 of bank charges from the statement, the books show $62,000.
| Bank reconciliation, 31 Oct 2026 | Amount |
|---|---|
| Balance as per books | $62,000 |
| Add: cheque to Atlas Steel Supply, not yet presented | $4,500 |
| Less: cheque from Riverside Stores, deposited, not yet credited | $1,800 |
| Balance as per bank statement | $64,700 |
FAQ
Questions, answered
How often should I reconcile the bank?
At least monthly, as soon as the statement is out, and weekly if the account is busy. A short gap makes differences easy to trace. Reconcile before locking the month, so the locked books match the bank.
Why do my books and bank statement differ?
Usually timing: cheques you issued that the supplier has not deposited, or deposits the bank has not credited. Otherwise something is missing from the books, such as bank charges, interest, a direct debit or a card or transfer receipt you have not recorded.
Does SimpleERP import bank statements?
No. There are no bank feeds and no statement import. You reconcile by ticking lines in the bank register against the statement. Anything on the statement but not in the books, such as charges, you post first, then tick it.
What happens to uncleared cheques?
They stay unticked and appear again in next month's reconciliation. When they show on the bank statement you tick them then. A cheque still uncleared after three months has likely lapsed and needs following up with the party.
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