How to Prepare a Bank Reconciliation Statement

Make sure your checking account is balanced by doing an account reconciliation.

In order to know--to the penny--how much money there is in your checking account, an account reconciliation is in order. It is best to reconcile checking accounts on a monthly basis and the best time to do so is as soon as your receive your bank statement. Whether you get a paper bank statement or a paperless one online, the process of reconciling the account is the same. Once you have prepared an account reconciliation statement a few times, it becomes quite easy.

Things You'll Need

• Calculator
• Checking account
• Bank statement (or online bank statement)

Instructions

Account Reconciliation

1. Bring your checkbook register up to date. Make sure that you have entered any ATM withdrawals or deposits. If your banking institution charges a fee, deduct that fee from your account. After you have entered all of the activity in your checking account reconciliation statement, add in the deposits and deduct the checks to come up with an ending balance.

2. Compare the checking account statement with your check register and check off in your checkbook all of the checks that have cleared (complete transactions). If you find transactions that you missed writing in your checkbook, write them in at the end and deduct the amount from your ending account balance.

   List the checks that you show outstanding by check number and the amount on a piece of paper. Total these checking account deductions and write down the sum in your bank reconciliation statement.

   List any deposits that you show in your account that the bank statement doesn't reflect.

3. Write down the ending balance that the bank shows on your statement at the top of your bank reconciliation statement. If you show deposits in your account that are not on the bank statement, add them to the balance from the above sentence.

   Write down this amount.

   Deduct the amount listed in Step 2 (your checking account balance).

   This is the adjusted amount and the total in your checking account should match the amount on the bank statement.

4. Reconcile if the sums do not equal by rechecking addition and subtraction; check to make sure the balance was carried forward correctly from one page to another in your check register, verify the deposits and compare the check amounts from your checkbook register and the bank statement.

Tips & Warnings

• Get in the habit of preparing a bank reconciliation statement for your checking account as soon as your statement arrives, whether by snail mail or email. The longer you put it off, the harder it is to ensure your checking account is balanced and you know where your money is going.

• Interestingly enough, if you find that your account is off and the amount that it is off is divisible by nine, there is most likely a transposition error.

• If you cannot reconcile your checking account, a visit to the bank will get you free help to find the error or errors.

References

• Bank Checking Account Reconciliations