How to Prepare a Bank Reconciliation Statement

In order to know--to the penny--how much money there is in your checking account, a reconciliation is in order. It is best to reconcile your checking account 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 done a reconciliation a few times, it becomes quite easy.

Difficulty: Moderate

Instructions

Things You'll Need:

• Calculator

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, add in the deposits and deduct the checks to come up with an ending balance.

2. Compare the bank 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 balance.
   
   List the checks that you show outstanding by check number and the amount on a piece of paper. Total these and write down the sum*.
   
   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 the piece of paper. 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*.
   
   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 reconciling 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. 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 account, a visit to the bank will get you free help to find the error or errors.

[antonwalter]

on 9/15/2009 Here is a quick example.

http://www.businessbookmall.com/AA%20AC2.pdf