Common Bank Reconciliation Mistakes

1) Incorrect accounting posting

If you post a transaction with the incorrect amount, the reconciliation will not balance.  The most common mistake is a transposition error.  If the sum of the digits of your difference is divisible by 9, you have a transposition error somewhere.

For example, if you entered 540.00, but it should have been 450.00, the difference between the two is 90.00.  9+0 = 9, and is divisible by 9, so that tells us that there is a transposition issue to look for (the 4 and 5 are reversed).

2) Incorrect bank posting

Cheques and debits occasionally clear the bank for a different amount than what you expected.  Compare the cheque you wrote to the cheque cleared by the bank.  If it is different, you will have to edit your transaction to account for the difference, and possibly contact your financial institution for directions on how to fix the error.

3) Incorrect dates

If a transaction appears on the bank statement, but does not appear in your bank reconciliation screen, you might have posted the transaction with an incorrect date.  Locate the transaction and verify the date is correct.  If incorrect, you can fix it and come back to the reconciliation to clear it.

4) Missing entries

Sometimes a charge or a deposit will appear on your bank statement that you did not enter (such as service charges).  Make sure all these transactions are entered.

5) Returned items

If a cheque bounces due to insufficient funds, make sure to reverse the item (and enter all the appropriate fees as a result).

6) Fraudulent items

This is an extremely rare possibility but does happen all the same.  It is possible that someone has altered a cheque so that it does not match what you have in your records.  Another possibility is forged cheque forms, or stolen bank account information.  It is important to identify fraud and alert your bank as soon as it is identified, thereby eliminating additional problems and preserving your ability to recover lost funds.

If you are still having trouble reconciling your bank, the best advice is to walk away and give yourself a break.  Sometimes, even 30 minutes away can clear your head and you can come back with fresh eyes and the mistake will pop right out at you.

Last updated on December 10, 2019 by FCC AgExpert