Why it matters
Reconciling finds bank charges you did not record, deposits that never arrived, payments recorded twice and fraud. It also gives your accountant and auditor confidence in your cash balance.
What you need
- The bank statement for the month, ideally as an Excel or CSV e-statement.
- Your cash book or the bank account ledger in your accounting software.
- Last month's reconciliation, to check outstanding items.
The steps
- Check that the opening balance on the statement agrees with last month's reconciled closing balance.
- Tick off each deposit on the statement against receipts in your books.
- Tick off each withdrawal, cheque and transfer against payments in your books.
- Record items that are on the statement but not in your books, such as bank charges, interest and direct debits.
- List items in your books that are not yet on the statement, such as cheques not yet presented or deposits in transit.
- Adjust the statement balance for those timing items. The result should equal your book balance.
- Investigate any remaining difference until it is zero.
Common problems
- Amounts typed with digits swapped. A difference divisible by nine is a clue.
- Transactions recorded in the wrong bank account.
- Old uncleared cheques that should be cancelled.
- Mobile money charges not recorded.
Doing it in InsightBooks
Upload the statement as CSV, Excel or OFX. Excel e-statements from Standard Bank, NBS Bank and National Bank of Malawi are recognised automatically. InsightBooks suggests matches, lets you record charges from the statement and completes the reconciliation only at a zero difference.
Frequently asked questions
How often should I reconcile?
At least monthly for every bank account. Busy businesses often reconcile weekly.
What if I cannot find the difference?
Check the opening balance first, then look for transposed digits, duplicates and items posted to the wrong account.
Related
- Bank Reconciliation Software for Malawi BanksImport bank statements (CSV, Excel, OFX and Standard Bank, NBS and NBM e-statements), match them to your books and finish only when the difference is zero.
- Accounting Software for Malawi BusinessesDouble-entry accounting in MWK with chart of accounts, journals, trial balance, profit and loss, balance sheet, cash flow, period locks and multi-branch reporting.
- POS Cash Reconciliation: How to Cash Up a TillHow to open a till with a float, count cash at the end of the day, compare it to POS sales, explain shortages and bank the takings.