Bank Reconciliation

Reconciliation is the monthly act of humility: the bank's statement against your ledger's bank account, line by line, until the difference is explained or zero. It is also the single control that catches the widest range of problems — missed entries, double entries, wrong-bank mappings, fraud.

Why yours currently doesn't match (and the fix)#

The classic restaurant mismatch: card sales post straight to the bank account on sale day, but the processor settles two days later, net of fees, in bundles. The ledger's bank is perpetually ahead of the statement, and every month someone "reconciles" by explanation rather than by matching.

Tender clearing is the structural fix: card tenders post to the clearing account, and only settlements — which do match statement lines — touch the bank. With it enabled, the bank account moves only when the bank moves.

The monthly routine#

1. Take the statement for the period.
2. Match ledger entries to statement lines — settlements, deposits, supplier payments, bank charges.
3. What remains unmatched is a short, meaningful list: deposits in transit, cheques not yet cleared, bank charges not yet recorded (record them now), and — the reason the routine exists — anything that shouldn't be there.

Reading persistent differences#

• Statement has it, ledger doesn't → an unrecorded event: bank charges, a direct debit, a customer paying straight into the account. Record it.
• Ledger has it, statement doesn't (for long) → in-transit gone stale: a deposit that never reached the bank, a stale cheque, or a mapping error posting to the wrong bank.
• Clearing balance growing week over week → settlements late or unrecorded; chase the processor's settlement report.

Reconcile monthly at worst. The task's difficulty grows with the square of the gap — a month reconciles in an hour, a quarter in a week of grief.