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Bank Reconciliation Step-by-Step

Bank Reconciliation Step-by-Step

Master the bank reconciliation process with BigLedger’s AI-powered matching.

Overview

Bank reconciliation ensures your book balance matches your bank statement, identifying discrepancies and maintaining accurate cash records.

Prerequisites

  • Bank account setup in COA
  • Bank statement (PDF/CSV/Direct feed)
  • Posted transactions in system
  • Reconciliation permissions

Step-by-Step Process

Step 1: Import Bank Statement

Method 1: Direct Bank Feed

  1. Go to Finance → Bank Reconciliation
  2. Select bank account
  3. Click Sync Bank Feed
  4. Authenticate with bank
  5. Select date range
  6. Import transactions

Method 2: File Import

  1. Download bank statement
  2. Click Import Statement
  3. Select file format:
    • CSV
    • Excel
    • PDF (with OCR)
    • MT940
  4. Map columns if needed
  5. Import transactions

Step 2: Automatic Matching

BigLedger’s AI matches transactions:

Matching Criteria

  • Amount (exact or within tolerance)
  • Date (exact or within range)
  • Reference number
  • Description keywords
  • Check numbers

Match Confidence Levels

  • 🟢 High (95-100%): Auto-matched
  • 🟡 Medium (70-94%): Suggested matches
  • 🔴 Low (<70%): Manual review needed

Step 3: Review Matches

Confirmed Matches

  • System shows green checkmark
  • No action needed
  • Already reconciled

Suggested Matches

  1. Review each suggestion
  2. Verify details match
  3. Click Confirm Match
  4. Or select different transaction

Unmatched Items

Bank transactions without book entries:

  • Bank charges
  • Interest earned
  • Direct deposits
  • Auto-payments

Book entries without bank transactions:

  • Outstanding checks
  • Deposits in transit
  • Bank errors
  • Timing differences

Step 4: Create Missing Entries

For unrecorded bank transactions:

  1. Click Create Entry on unmatched item
  2. Select transaction type:
    • Bank charge
    • Interest income
    • Transfer
    • Other
  3. Enter details:
    • Account to post
    • Description
    • Tax code if applicable
  4. Save and match

Step 5: Handle Exceptions

Outstanding Checks

  • List checks not yet cleared
  • Monitor aging
  • Follow up if stale-dated
  • Consider stop payment

Deposits in Transit

  • Identify uncleared deposits
  • Verify with bank
  • Check for delays
  • Investigate if unusual

Bank Errors

  1. Document the error
  2. Contact bank
  3. Create adjustment entry
  4. Track resolution

Step 6: Complete Reconciliation

  1. Verify reconciliation summary:

    Book Balance:         10,000.00
+ Deposits in Transit: 2,000.00
- Outstanding Checks:  (1,500.00)
+ Bank Adjustments:       50.00
= Bank Balance:       10,550.00

  2. Confirm bank statement balance matches

  3. Review reconciliation report

  4. Approve reconciliation

  5. Lock period if month-end

Advanced Features

Multi-Currency Reconciliation

  • Handle foreign currency accounts
  • Automatic exchange rate updates
  • Realized gain/loss calculation
  • Revaluation entries

Bulk Operations

  • Match multiple transactions
  • Bulk create entries
  • Mass unmatch
  • Batch approvals

Rules Engine

Create matching rules:

  • Recurring transactions
  • Vendor payments
  • Customer receipts
  • Standard amounts

Reports

Reconciliation Reports

  • Reconciliation Summary
  • Outstanding Items List
  • Reconciliation History
  • Audit Trail Report

Analysis Reports

  • Cleared vs Outstanding
  • Aging Analysis
  • Reconciliation Timeline
  • Exception Report

Best Practices

Daily Reconciliation

  • Import transactions daily
  • Review and match immediately
  • Investigate discrepancies quickly
  • Maintain clean records

Month-End Procedures

  1. Complete all entries
  2. Final statement import
  3. Clear all matches
  4. Document exceptions
  5. Generate reports
  6. Obtain approval
  7. Lock the period

Controls

  • Segregate duties
  • Independent review
  • Timely completion
  • Document exceptions
  • Maintain support

Troubleshooting

Cannot Match Transactions

  • Check date ranges
  • Verify amounts
  • Review references
  • Check for duplicates

Out of Balance

  • Verify opening balance
  • Check for unposted entries
  • Review adjustments
  • Confirm exchange rates

Missing Transactions

  • Refresh bank feed
  • Check import mapping
  • Verify date range
  • Review filters

Tips for 95% Auto-Match Rate

  1. Consistent References: Use invoice numbers in payment references
  2. Timely Recording: Enter transactions promptly
  3. Clean Data: Maintain accurate vendor/customer names
  4. Rules Setup: Configure recurring transaction rules
  5. Regular Reconciliation: Don’t let transactions accumulate

Need assistance? Our support team can help achieve 95% automation. Contact support@bigledger.com