What reconciliation is
You compare the transactions in your accounting software to the bank or card statement, line by line, until the ending balance in the software matches the statement. Anything that does not match is either a recording error or a real problem you need to know about.
How to do it
Open the reconcile screen for the account and enter the statement ending date and balance. Tick each transaction that appears on the statement. Add anything missing and fix anything wrong. When the difference reads zero, finish the reconciliation and save the report.
Why it matters
Reconciled books catch fraud, duplicate charges, missed deposits and bank errors. Lenders, tax preparers and buyers trust numbers that reconcile.
When it will not balance
Check for transactions entered twice, a transaction in the wrong account, a changed past entry, a missing deposit, and a typo in the statement balance. Look at the difference amount: if it equals one transaction, or half of one, you have found a likely cause.
How often
Every month, for every bank account and credit card. Reconcile payment processor accounts such as Square or Stripe too.
Common questions
Do bank feeds make reconciliation unnecessary?
No. Feeds import transactions. Reconciliation confirms nothing is missing, doubled or wrong.
Can you do this for me?
Yes, it is the core of our monthly bookkeeping.
This guide is general information, not tax, legal or accounting advice. Rules, fees and due dates change; check with the IRS, the NJ Division of Taxation or a licensed professional for your situation.