Reconcile your bank account (Alt+B)

Why reconcile

Your bank ledger and the bank's statement rarely agree on any given day: a cheque you issued may not be presented yet, a deposit may still be in transit, or a bank charge may not be booked. Reconciling finds every such item, so the difference is explained rather than unknown.

Open it

Press Alt+B anywhere or click Bank Reco under Daily Books.

Steps

1. Select Bank Account (for example ICICI BANK).
2. Set Reconcile Up To: normally the last date on the bank statement you are holding.
3. Read the four cards: Company Book Balance, Uncleared Payments (−) (cheques issued but not yet cleared), Uncleared Deposits (+) (cheques received but not yet credited) and the Calculated Bank Balance. The calculated balance should equal the bank statement.
4. Work down the Uncleared Transactions list (Date, Particulars, Inst. No., Debit, Credit, Bank Date). For each entry you can find on the statement, enter the Bank Date (the date the bank processed it). It leaves the uncleared list.
5. Anything left uncleared is the explanation for the difference between your books and the bank.

If the calculated balance still differs

• A bank charge, interest or auto-debit is on the statement but not in your books: book it as a Payment or Receipt, then enter its bank date.
• An amount differs: open the voucher from the ledger and correct it.
• A receipt is in the bank but not in the books: record the Receipt (F6).