Why doesn't my bank balance match my books?
A difference between the statement balance and the general ledger balance is normal. The work is accounting for it.
Ordinary explanations
Most differences fall into a small number of categories. None of them means the bookkeeping is wrong; each one is a reconciling item until the evidence says otherwise.
- Timing differences
- A payment or deposit is recorded in one place before it clears in the other. Outstanding cheques and deposits in transit are the usual examples.
- Unrecorded bank activity
- Service charges, interest, card processing fees or returned items applied by the institution and not yet entered in the ledger.
- Unmatched transactions
- An entry appears on one record with no counterpart on the other for the period reviewed.
- Possible duplicates
- Similar entries within a short window. These are candidates for review — a repeated payment to the same supplier can be entirely legitimate.
- Period coverage
- The two documents cover different date ranges, so the closing balances were never expected to agree.
- Opening balance carry-forward
- A difference originating in an earlier period that has been carried forward into this one.
- Multiple currencies
- Amounts recorded in more than one currency. Until the currency treatment is established, no single-currency total is calculated.
What a review can and cannot conclude
A review can establish, to the exact cent, which items explain the variance and which do not. It cannot conclude intent, and it does not label anything an error. Items it cannot explain from the documents supplied are reported as “Unable to determine — review required”, with the supporting evidence attached so you or your accountant can decide.
What you need to run one
The bank statement and the general ledger for the same period. Nothing else — no accounting software connection, no bank login. If you supply only one of the two, the report says so and performs no comparison.