Bank Reconciliation Section 7.4

Reconciling your account Banks send statements monthly Banks send statements monthly Cancelled checks may accompany statement Cancelled checks may accompany statement Banks can provide copies of cancelled checks upon request (and fee) Banks can provide copies of cancelled checks upon request (and fee) YOU NEED TO MATCH WHAT THE BANK SHOWS TO YOUR REGISTER!

What am I looking for? Did I make an error calculating my balance? Did I make an error calculating my balance? Did I forget to record a transaction? Did I forget to record a transaction? Did I write down the wrong amount spent or deposited? Did I write down the wrong amount spent or deposited? Did the bank make any errors? Did the bank make any errors? THESE ARE THE MOST COMMON ERRORS!

Why??? Your checkbook register should accurately reflect your true available balance. Your checkbook register should accurately reflect your true available balance. You want to ensure you or the bank has not made a mistake. You want to ensure you or the bank has not made a mistake. You want to account for any fees charged by the bank. You want to account for any fees charged by the bank. BOTTOM LINE: BOTTOM LINE: You want to ensure you have enough funds to pay for what you need and want. You want to ensure you have enough funds to pay for what you need and want.

Some other things to notice Did someone not cash that check? Did someone not cash that check? Am I being charged too many fees? (i.e. ATM fees) Am I being charged too many fees? (i.e. ATM fees) Budget implications Budget implications

Reconciliations Many different forms Many different forms Find one that works best for you. Find one that works best for you. Should be done AT LEAST monthly Should be done AT LEAST monthly Save all documents – reconciliation, statements, cancelled checks Save all documents – reconciliation, statements, cancelled checks

BASIC RECONCILIATION CHECK REGISTER BANK STATEMENT Ending Balance on Register ADD: Deposits not recorded in register SUBTOTALDEDUCT: Service fees charged from bank Adjusted balance Ending Balance on Statement ADD: Deposits bank has not recorded yet SUBTOTALDEDUCT: Outstanding checks Adjusted balance

Finished! When done, make certain that you deduct any fees out of your checkbook register!!! When done, make certain that you deduct any fees out of your checkbook register!!!