How do I do bank reconciliation for my business?

# How to Do Bank Reconciliation for Your Business Bank reconciliation is the process of matching your business's cash book records with your bank statement to ensure accuracy. **Complete bank reconciliations monthly** to catch errors early and maintain accurate financial records required for SARS compliance. ## What You Need Before Starting - Your bank statement for the reconciliation period - Your cash book or accounting records for the same period - Previous month's reconciliation (if available) - Outstanding cheques and deposit records ## Step-by-Step Bank Reconciliation Process ### 1. Compare Opening Balances Start with your cash book opening balance and verify it matches your bank statement's opening balance from the previous reconciliation. ### 2. Match Deposits and Credits - **Tick off matching deposits** that appear in both your cash book and bank statement - **Identify deposits in transit** - amounts recorded in your cash book but not yet showing on the bank statement - **Note any bank credits** not recorded in your cash book (interest earned, customer payments) ### 3. Match Payments and Debits - **Tick off matching payments** that appear in both records - **Identify outstanding cheques** - cheques you've written and recorded but haven't been presented to the bank - **Note bank charges and debits** not recorded in your cash book (bank fees, stop order payments) ### 4. Identify Discrepancies Look for: - **Timing differences** (deposits in transit, outstanding cheques) - **Bank errors** (incorrect amounts, duplicate transactions) - **Recording errors** in your cash book - **Bank charges** not recorded in your books ## Preparing the Reconciliation Statement **Cash Book Balance** - Add: Deposits in transit - Add: Bank credits not recorded - Less: Outstanding cheques - Less: Bank charges not recorded **= Adjusted Cash Book Balance** **Bank Statement Balance** - Add: Deposits in transit - Less: Outstanding cheques **= Adjusted Bank Balance** Both adjusted balances must match. ## Common South African Banking Items - **EFT charges**: R2.50 to R25.00 per transaction - **Card payment fees**: 2-4% of transaction value - **Monthly account fees**: R50 to R350 depending on account type - **Cheque deposit fees**: R5 to R15 per cheque ## Monthly Reconciliation Best Practices 1. **Reconcile by the 10th** of each month for the previous month 2. **Investigate differences immediately** - don't let them accumulate 3. **Keep supporting documents** for all adjustments 4. **Update your cash book** with bank charges and interest 5. **File reconciliations** for audit purposes ## Red Flags to Watch For - Balances that never reconcile - Increasing outstanding cheques over time - Frequent bank errors - Missing deposits or payments WeekdayApp automates much of this reconciliation process for South African accounting practices, with bank feed integration and automated matching starting at R199/user/month. Regular bank reconciliation protects your business from fraud, ensures accurate financial reporting, and keeps your records SARS-compliant. Missing discrepancies can result in cash flow problems and incorrect tax submissions.