Bank Reconciliation

Bank Reconciliation is the process of matching your bank's transaction records against the entries in your accounting books. This ensures that every transaction on your bank statement is accounted for in the system and helps identify discrepancies like missing entries, duplicate charges, or unauthorized transactions.

Starting a Reconciliation

Navigate to Accounting → Bank Reconciliation in the sidebar. Before you begin, you need to provide three pieces of information:

• Bank Account — Select which bank account to reconcile from the dropdown.

• Statement End Date — The closing date of your bank statement period.

• Statement Ending Balance — The closing balance shown on your bank statement.

Click Start Reconciliation to proceed.

The Reconciliation Interface

The reconciliation screen is a dual-panel layout:

• Left panel — Bank Transactions: Displays unreconciled transactions imported from your bank statement. Each row shows the date, description, debit/credit amount, and a checkbox.

• Right panel — Book Entries: Displays unreconciled entries from your accounting books (journal entries, payments, expenses). Each row shows similar details with a checkbox.

At the top of the interface, you'll see a running summary showing the statement balance, matched total, and any remaining difference. The goal is to bring the difference to zero.

Matching Transactions

There are two approaches to matching:

Auto-Match: Click the Auto-Match button to let the system automatically pair bank transactions with book entries based on amount, date proximity, and description similarity. Matched pairs are highlighted and checked off automatically.

Manual Match: For transactions that weren't auto-matched, select a bank transaction on the left and a corresponding book entry on the right by clicking their checkboxes. If the amounts match, confirm the pair.

Reconciliation Process

A typical reconciliation follows these steps:

1. Import your bank statement (via Bank Accounts → Import Statement) if you haven't already.

2. Navigate to Bank Reconciliation and select the bank account.

3. Enter the statement end date and closing balance from your bank statement.

4. Click Start Reconciliation to load unmatched items.

5. Use Auto-Match first to handle straightforward matches.

6. Manually match any remaining items, investigating discrepancies as needed.

7. Once the difference reaches zero, complete the reconciliation.

When to Reconcile

Reconciliation should be performed regularly — monthly at minimum, or more frequently for high-volume accounts. Regular reconciliation helps catch errors early, prevents fraud, and ensures your financial reports reflect your actual cash position.