What is a bank reconciliation?

A bank reconciliation compares the ending balance on a bank statement with the cash balance in the general ledger, then accounts for timing differences, fees, returned items and errors until both adjusted balances agree.

How often should you reconcile?

Reconcile every bank account at least monthly, using the statement date and the ledger balance for that same date. Higher-volume or higher-risk accounts may need a weekly or daily review.

What are deposits in transit and outstanding checks?

Deposits in transit are receipts already recorded in the books but not yet shown by the bank. Outstanding checks are payments already recorded in the books that have not yet cleared the bank.

Can bank reconciliation be automated?

Yes. Matching software can pair bank and ledger transactions, surface exceptions and retain review evidence. A person should still investigate unmatched items, approve adjustments and sign off the completed reconciliation.

Bank reconciliation template (Excel)

Last reviewed 2026-09-27

Download the three-tab Excel workbook, replace the worked example with your statement and ledger balances, and let its 18 formulas show whether the account is reconciled to zero.

Download the free Excel template

The included example is RECONCILED. The adjusted bank balance and adjusted book balance are both $23,080.00, leaving a $0.00 difference.

How to do a bank reconciliation in 6 steps

Enter the statement ending balance and the cash balance in your ledger for the same date.
Tick off every deposit and payment that appears in both the statement and your ledger.
Add anything in the ledger but not on the statement as a deposit in transit or outstanding check.
Add anything on the statement but not in the ledger, such as fees, interest or returned checks, using the matching type.
Check that the difference is $0.00. If it is not, work through the checks below.
Post the book-side items to the ledger, obtain review sign-off, and keep the workbook with the month-end records.

Worked example

The workbook starts with a $25,480.00 bank statement balance. It adds $3,200.00 of deposits in transit and subtracts $5,600.00 of outstanding payments, producing an adjusted bank balance of $23,080.00.

The books start at $23,297.50. Interest of $12.50 and a $45.00 book correction are added; a $35.00 bank fee and a $240.00 returned item are deducted. The adjusted book balance is therefore $23,080.00 too, and the status changes to RECONCILED.

Why it won't balance

Transposed digits: if the difference is divisible by 9, look for two digits entered in the wrong order.
Duplicates: check for a transaction entered twice in the ledger or twice on the adjustments tab.
Wrong side: confirm deposits, payments, fees and errors were classified on the bank or book side that actually needs adjusting.

Automatic matching, with the differences still visible

Valcenra matches bank and ledger transactions, separates timing items from genuine errors, and keeps unmatched amounts open for investigation instead of forcing a clean-looking zero.

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Common questions

What is a bank reconciliation?: A bank reconciliation compares the ending balance on a bank statement with the cash balance in the general ledger, then accounts for timing differences, fees, returned items and errors until both adjusted balances agree.
How often should you reconcile?: Reconcile every bank account at least monthly, using the statement date and the ledger balance for that same date. Higher-volume or higher-risk accounts may need a weekly or daily review.
What are deposits in transit and outstanding checks?: Deposits in transit are receipts already recorded in the books but not yet shown by the bank. Outstanding checks are payments already recorded in the books that have not yet cleared the bank.
Can bank reconciliation be automated?: Yes. Matching software can pair bank and ledger transactions, surface exceptions and retain review evidence. A person should still investigate unmatched items, approve adjustments and sign off the completed reconciliation.