What reconciliation proves
Reconciliation checks that the transactions in your working file reproduce the balance shown by the bank. It helps catch missing pages, dropped rows, duplicate entries, sign errors and conversion mistakes before the data reaches an analysis or accounting system.
The core balance check
For a typical statement: opening balance plus total credits minus total debits equals closing balance. Confirm how your bank labels withdrawals and deposits, especially when exporting credit-card or overdraft statements where signs may work differently.
Reconcile in five steps
- Record the opening and closing balance from the source statement.
- Total the debit and credit columns in Excel.
- Apply the balance equation and calculate the difference.
- If it does not match, look for repeated headers, blank amount cells and wrapped transactions.
- Check reversals, brought-forward rows and the first and last transaction on every page.
When the running balance helps
Recalculate the balance row by row. The first point where your calculated balance differs from the statement often identifies the problem. Once corrected, lock or protect the source-data columns before adding categories or notes.