What Is Bank Reconciliation?
By Cole Kline, Founder, Edge Operations Managers
Bank reconciliation is the step where your books are matched against your bank statement. Every deposit and payment in the bank should appear in your books, and every entry in your books should appear in the bank.
How it works
- Start with the ending balance on the bank statement.
- Compare each transaction on the statement with your books.
- Mark the ones that match.
- Look into anything that does not match: missing entries, duplicates or timing differences.
- Confirm the reconciled balance matches the statement.
Why it matters every month
- Errors are easier to find while the month is fresh
- Duplicate or missing transactions get caught
- Your CPA gets books that tie to the bank
The same process applies to credit card accounts.
Edge bookkeeping is reconciliation and categorization only. It is not accounting, tax preparation, tax advice or CPA work. Reconciliation is one of the two core parts of the service.
Related: Virtual bookkeeping services