Free tool
Bank reconciliation helper
Enter your figures and the tool builds an updated cash book and a bank reconciliation statement step by step. It then checks the result against the bank statement balance.
How to read the result
First the tool corrects the cash book for items the bank already knows about, such as interest and charges. Then it reconciles that corrected balance to the bank statement using timing differences: it adds unpresented cheques and subtracts uncredited lodgements. If the final figure matches the bank statement, it reconciles. If not, check which side each item belongs on.
Why the two records disagree
A bank reconciliation lines up two records of the same money: the business's cash book and the bank's statement. They rarely match on a given day, and the reason is usually timing, not error. The business records a cheque when it writes it. The bank only knows once the cheque is presented.
The bank deducts charges and collects direct debits when they fall due, and the business finds out when the statement arrives. Reconciliation means explaining each of those differences until none is left.
The work has two stages. First, update the cash book for items the bank already knew about but the business had not recorded: charges, interest, standing orders, dishonoured cheques and credit transfers received. Then build the reconciliation statement for items the business had recorded but the bank had not yet processed: unpresented cheques and uncredited lodgements.
The cash book already has those timing items, so they are never posted again. They only appear on the statement. Get that split right and the statement will agree with the updated cash book balance.
If it will not reconcile
The gap is a clue. Check whether a charge or transfer was left out of the cash book, or whether an overdraft has confused the signs. Many students slip here because the direction of each adjustment depends on which balance you start from.
If yours will not agree, send us your cash book and statement. One of our teachers can find the difference with you in a trial class so the method sticks. Book a trial class.
Frequently asked questions
What are unpresented cheques?
These are cheques you have written and recorded in the cash book, but which the payee has not yet paid into their bank. They have not left your bank account yet.
What are uncredited lodgements?
Amounts you have paid in and recorded in the cash book, but which the bank has not yet added to your account.
Why update the cash book first?
Items like bank charges and direct debits appear on the bank statement before you record them. You correct the cash book for these first. Then you reconcile the corrected balance to the bank statement using the timing differences.
Bank reconciliations still confusing?
Send the question you are stuck on, and the teacher will talk it through in the trial class. One-to-one and online, from RM75/hr.
One-hour paid trial · Same-day reply