What goes on the bank side and what goes on the book side?

The bank side takes items your books already hold but the bank has not processed yet: deposits in transit and outstanding checks. The book side takes items the bank has processed but your books do not show yet: bank fees, interest, returned (NSF) checks and your own recording errors.

What if the adjusted balances still do not agree?

Compare every statement line with the ledger again, looking for amounts entered wrongly, items entered twice, and items on the wrong side. A difference that divides exactly by 9 often means two digits were transposed; a difference that does not, like the $280 in this example, points to a wrong amount or a missing item instead.

Do the bank-side adjustments need a journal entry?

No. Deposits in transit and outstanding checks are timing differences that clear on a later statement. Only the book-side items, such as fees, interest, NSF checks and error corrections, are recorded in the ledger.

How often should a bank account be reconciled?

At least monthly, at the statement date, using the ledger balance for that same date. Higher-volume accounts are often reconciled weekly or daily.

Bank reconciliation example

Last reviewed 2026-09-27

A bank reconciliation matches your bank statement to your books at one date. Adjust the bank side for items the bank has not recorded yet: deposits in transit and outstanding checks. Adjust the book side for items you have not recorded yet: bank fees, interest, returned (NSF) checks and errors. The two adjusted balances must be equal. If they are not, the difference is something still to find, as in the example below.

Worked example 1: it does not tie yet (as of 31 August)

Bank side	Amount
Balance per bank statement	$12,400.00
Add: deposit in transit	$1,500.00
Less: outstanding check #1043	($800.00)
Less: outstanding check #1045	($1,200.00)
Adjusted bank balance	$11,900.00

Book side	Amount
Balance per books	$11,935.00
Less: bank service fee	($25.00)
Add: interest earned	$10.00
Less: NSF customer check	($300.00)
Adjusted book balance	$11,620.00

$12,400.00 + $1,500.00 − $800.00 − $1,200.00 = $11,900.00 on the bank side, and $11,935.00 − $25.00 + $10.00 − $300.00 = $11,620.00 on the book side. The difference is $280.00, so the account does not tie. The next step is to look for an error.

Worked example 2: finding the difference

Comparing the statement with the ledger line by line turns up a check the bank paid for $240.00 that was entered in the books as $520.00. That is a recording error of $280.00, not a transposition: 280 does not divide exactly by 9. The books took $280.00 too much out of cash, so correcting the entry adds it back on the book side:

$11,620.00 + $280.00 = $11,900.00, which equals the adjusted bank balance of $11,900.00. The difference is now $0.00 and the account is reconciled.

Only the book-side items are posted: the fee, the interest, the NSF check and the correction to the check. The deposit in transit and the two outstanding checks should clear on the September statement.

The 6 most common discrepancies

Deposits in transit: recorded in the books, not yet on the statement.
Outstanding checks: written and recorded, not yet cleared by the bank.
Bank fees and interest that are on the statement but not yet booked.
NSF or returned customer payments that the bank has reversed.
Recording errors: transposed digits, wrong amounts and duplicates. A difference that divides exactly by 9 often points to a transposition.
Card and payment processor payouts that land later than the sale and net of fees, so the deposit is smaller than the sales recorded.

To work through your own account, the free bank reconciliation template lays out the same bank side and book side in Excel.

Try Valcenra free

Valcenra imports a bank statement file (OFX, QFX, QBO, CSV or CAMT.053) and accepts it whole or rejects it whole against the debit and credit totals you enter from the statement. It shows gross debits and gross credits separately and flags transactions already posted, so a missing or duplicated line surfaces before the balances are compared.

The free workspace is one entity, two users and five stored analysis runs a month, with no card and no sales call.

Start free — no card

Common questions

What goes on the bank side and what goes on the book side?: The bank side takes items your books already hold but the bank has not processed yet: deposits in transit and outstanding checks. The book side takes items the bank has processed but your books do not show yet: bank fees, interest, returned (NSF) checks and your own recording errors.
What if the adjusted balances still do not agree?: Compare every statement line with the ledger again, looking for amounts entered wrongly, items entered twice, and items on the wrong side. A difference that divides exactly by 9 often means two digits were transposed; a difference that does not, like the $280 in this example, points to a wrong amount or a missing item instead.
Do the bank-side adjustments need a journal entry?: No. Deposits in transit and outstanding checks are timing differences that clear on a later statement. Only the book-side items, such as fees, interest, NSF checks and error corrections, are recorded in the ledger.
How often should a bank account be reconciled?: At least monthly, at the statement date, using the ledger balance for that same date. Higher-volume accounts are often reconciled weekly or daily.

General information, not accounting advice. Last reviewed 2026-09-27.