How to reconcile a bank account
Reconciliation is the strongest control a small business has, and it takes twenty minutes once you stop dreading it. Here is the whole routine.
1. Gather the statement
Get the bank statement for the period — paper, PDF or CSV. Note the closing date and closing balance; those two numbers define the job.
2. Start the reconciliation
In SeroBooks open Accounting → Banking, choose the account, and enter the statement date and closing balance. The screen lists your ledger's own entries for the period, uncleared.
3. Tick what cleared
Work down the statement line by line, ticking the matching ledger entry for each. Deposits should match in lumps — if yours don't, you are posting sales straight to the bank instead of through Undeposited Funds.
4. Enter charges and interest
Service charges and interest usually exist only on the statement. Add them inside the reconciliation so they post to the right expense and income accounts.
5. Explain what didn't clear
Outstanding cheques and in-transit deposits are supposed to be unticked — they are the legitimate difference between the books and the bank. Anything else unticked is a question to answer now, not next quarter.
6. Finish at zero
When the difference reads 0.00, complete the reconciliation. The ticked entries lock into this statement, and next month starts clean.
The mistake: forcing the match
When a reconciliation will not come to zero, the tempting move is an adjusting entry to close the gap. It works, briefly. What it actually does is convert a knowable problem — a duplicate payment, a missed deposit, a transposed figure — into an unexplained number that grows quietly until year end, when it costs a great deal more to unpick.
An unexplained difference is a finding, not an inconvenience. Reconcile one statement period at a time and finish it completely before starting the next; doing two at once is how differences get lost between them.
Timing differences are not errors
Money taken today and banked tomorrow genuinely sits in a clearing account rather than the bank. A cheque written on the 28th that clears on the 3rd is outstanding, not missing. Both are timing differences that clear themselves, and both are normal on every reconciliation ever performed.
The discipline is telling them apart from real breaks: a timing difference has a date it will resolve on, and a real break does not.
What SeroBooks does with this
The Banking screen shows the ledger's balance beside the bank's on the same row, so the question 'do these agree?' never requires opening two systems. CSV import with reusable rules classifies the recurring lines, review catches duplicates and matches payments before anything posts, and undeposited funds batch so the books show the same single deposit line the statement will.
Service charges and interest are entered inside the reconciliation, where you find them, so the session finishes closed rather than nearly closed.
See it in your own numbers.
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