Bank reconciliation statement (BRS) step by step
2 min read
Updated 03 Oct 2026
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AI summary
Why the bank balance and your books differ, and how to match them line by line every month.
8 sections 6 steps
Key facts
- A bank reconciliation statement (BRS) explains the difference between the balance in your bank account (books) and the balance on the bank statement on the same date.
- Do it every month. A gap left for months turns into missed entries, duplicate entries and wrong GST.
- Differences come from timing (cheques issued but not yet cashed, deposits not yet credited) or from missing entries (bank charges, interest, direct receipts you have not recorded).
Common reasons for a difference
| Reason | Effect on bank statement vs books | What to do |
|---|---|---|
| Cheque issued, not yet presented | Bank shows more | Nothing; it will clear. Show it in BRS |
| Cheque deposited, not yet credited | Bank shows less | Nothing; show it in BRS |
| Bank charges, GST on charges | Bank shows less | Pass entry in books |
| Interest credited by bank | Bank shows more | Pass entry in books |
| Customer paid by NEFT/UPI directly | Bank shows more | Pass receipt entry |
| Auto-debit (EMI, insurance, NACH) | Bank shows less | Pass payment entry |
| Cheque bounced | Bank shows less | Reverse the receipt, charge bounce fees |
| Error in books or bank | Either | Correct the entry, or ask the bank |
Steps
- Take the bank statement and the bank ledger for the same period.
- Tick off every entry that appears in both, matching amount and cheque/UTR number.
- Items only in the bank statement (charges, interest, direct receipts, auto-debits, bounces): record them in your books now.
- Items only in your books (cheques issued or deposited but not cleared): list them in the BRS.
- Prepare the BRS:
| Particulars | ₹ |
|---|---|
| Balance as per books (after step 3) | 2,40,000 |
| Add: cheques issued but not presented | 35,000 |
| Less: cheques deposited but not credited | (15,000) |
| Balance as per bank statement | 2,60,000 |
- If the BRS does not tie, look for a transposed figure (₹5,400 typed as ₹4,500: differences divisible by 9 are a clue), a duplicate entry, or an entry in the wrong bank ledger.
Common questions
How long can a cheque stay unpresented?
A cheque is valid for 3 months from its date. If it is still not presented after that, reverse the payment entry and pay the party again if needed.
Can I claim GST on bank charges?
Yes, if the bank shows your GSTIN on its invoice and the charge appears in your GSTR-2B. Book the GST part as input tax credit, not as part of the expense.
In Hisab Central
Use Bank Reconciliation (Alt+B) to mark cleared entries with the bank date and see the reconciled balance.
Sources
Law as of October 2026. Verify against the latest notifications before relying on it for filings.
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