How to Reconcile a Bank Statement

Reconciling your account identifies what transactions are outstanding.

Even if crunching numbers is not your greatest talent, doing so is a fact of modern life. If you have a checking account, you can either rely on your bank to tell you the truth about how much money you have, or you can reach for a pencil and calculator and figure it out for yourself. You can do this monthly when your bank statement comes in, or if your budget is a little tight, you can even do it daily to avoid mistakes and costly overdraft penalties.

Things You'll Need

• bank statement
• checkbook register
• calculator
• pencil

Instructions

1. Place your bank statement and your checkbook register side by side so you can compare the two with a minimum of fuss. If you want to reconcile daily, and if you have Internet access to your account, sign onto your bank's website and print a copy of your account's daily activity.

2. Begin with your deposits. For each one recorded on your statement, cross off its corresponding entry in your register. Total all the deposits that you have not crossed off. If you deposited a check in the last few days, it may not have cleared yet and it won't appear on your statement. But that doesn't mean your bank won't have a record of it in a day or two.

3. Repeat the process with all ATM debits you've made, any bank card charges you've made and all checks you have written. Compare your register to your statement, and cross off all those that appear on your statement. If you wrote checks in the last few days, they may not have reached your bank yet for payment. Total all your outstanding debits, just as you did your deposits.

4. Locate the closing balance on your bank statement. This usually appears in a summary at the top or bottom of your statement, showing what your balance was at the beginning of the month, adding the total deposits your bank has a record of, subtracting the debits it has a record of, then arriving at an ending balance.

5. Add your outstanding deposits to your ending balance. If your ending balance is $750, and a deposit in the amount of $300 hasn't appeared on your statement yet, total these two numbers. The result is $1,050.

6. Subtract your outstanding debits from the total of your ending balance plus outstanding deposits. If $200 worth of debits and written checks haven't cleared your bank account yet, subtract $200 from $1,050. The difference is $850, and this number should match the balance you show in your checkbook register.

Tips & Warnings

• If the number you come up with doesn't match your register, you (or possibly your bank) have made a mistake somewhere. Do your math again. You might have tapped a number into your calculator wrong. If you're still off, divide the difference by nine. If it divides evenly, you've probably transposed a number when you entered it in your checkbook. If the number isn't divisible by nine, you may have forgotten to enter a bank card transaction. You'll have to compare all your debits and transactions one more time. In the worst case, take your register to your bank and ask for help in locating the problem.

References

• Ouachita Baptist University: Steps in Reconciling a Bank Statement
• MoneyRates: Tips to Reconcile Your Bank Account; Karen Lawson; February 2009

Resources

• Read this Article in Spanish