Statement Reconciliation

Last updated: June 20, 2026

Reconciliation proves your books against an outside record, usually a bank statement, by matching what you recorded to what actually moved and explaining anything left over. It is the routine that catches missing entries, duplicates and stray bank fees before a period is closed.

What you will learn
  • What the stages of a reconciliation are
  • How matching marks items as cleared
  • What outstanding items are
  • Why you reconcile before closing

Anatomy of the screen

A reconciliation works through a few stages:

  • Statement – enter or import the bank statement with its opening and closing balances and date range.
  • Match – tick your ledger entries against the statement lines.
  • Outstanding – the entries not yet matched, such as uncleared cheques and deposits in transit.
  • Report and explain – the reconciliation summary, with a place to explain any residual variance.

How it behaves

Matching and clearing

Each ledger item is matched to a statement line. When everything ties out, the reconciliation is marked complete and the matched items become reconciled, so they are not offered again next time. The aim is a closing position where your books and the bank agree to the cent.

Outstanding items

Genuine timing differences, a cheque you wrote that has not cleared, a deposit not yet credited, are held as outstanding and carry forward as reconciling items rather than being forced to match. They clear in a later reconciliation when the bank catches up.

Lifecycle

A reconciliation runs New, then Complete once balanced; it can be re-opened to adjust, or voided. Only accounts flagged require-reconcile come into scope.

Worked example

Your closing balance is short by exactly one cheque you posted but the bank has not paid. You mark that cheque outstanding, the reconciliation balances, and it clears automatically next month when it appears on the statement.

Edge cases and good practice

  • Reconcile before you close. A clean reconciliation is the proof a period is ready to lock.
  • Outstanding versus missing. If an item is genuinely absent from your books, add the entry; only true timing differences are outstanding.

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