# How to reconcile a bank statement

How to reconcile a bank statement in plain steps: match each line to your books, list what only one side has, and adjust until both balances agree.

Published October 27, 2026.

To reconcile a bank statement means to compare the bank's record of an account with your own record. You check that both agree, to the cent. When they do not agree, you find out why.

The difference is usually something you want to know about: a deposit you did not record, a payment you entered twice, a fee, or a charge you did not make. The IRS says, "You should reconcile your checking account each month" ([IRS Publication 583](https://www.irs.gov/publications/p583)).

## The short version

- Check that the statement's beginning balance matches where your books started the month.
- Match each deposit and withdrawal on the statement to the same line in your books.
- List the items that only one side has.
- Adjust the bank balance for timing items. Adjust your books for items only the bank recorded.
- When both adjusted balances are the same, the account is reconciled.

## Words to know

- **Statement balance:** the ending balance on the bank statement.
- **Book balance:** the balance of the account in your own records.
- **Deposit in transit:** money you deposited that the bank had not posted by the statement date.
- **Outstanding check:** a check you wrote that the payee had not cashed by the statement date.

## Step 1: Check the starting point

Compare the statement's beginning balance with the ending balance from last month's reconciliation. They must agree. If last month was wrong, this month will be wrong by the same amount.

## Step 2: Match each line

Go down the deposits on the statement. Tick each one in your books. Then do the same for withdrawals: checks, card payments, transfers and fees.

## Step 3: List what only one side has

There are two kinds of items:

- **In your books, not yet at the bank.** Deposits in transit and outstanding checks. These are timing items. The bank will catch up.
- **At the bank, not yet in your books.** [Bank fees, interest](https://rightobooks.com/blog/interest-and-bank-fees-deductions/) and automatic payments. The IRS notes that a statement can include "bank charges you did not enter in your books" ([IRS Publication 583](https://www.irs.gov/publications/p583)).

## Step 4: Adjust both sides

Adjust the bank side for timing items. Adjust the book side for the items only the bank recorded. Then enter those items in your books, because they are real transactions.

## An example

Maya is a freelance designer with one [business checking account](https://rightobooks.com/blog/separate-business-and-personal-finances/). (She is an example, not a real person.) Her June statement ends at $8,412.60. Her books say $8,975.23. They are $562.63 apart.

She finds four items. On June 30 she deposited a $1,200.00 check, and the bank posted it on July 1. Check #1042 for $650.00 has not been cashed. The bank charged a $15.00 fee and paid $2.37 of interest.

| Bank side | Amount |
|---|---|
| Statement ending balance | $8,412.60 |
| Add deposit in transit | + $1,200.00 |
| Subtract outstanding check | − $650.00 |
| Adjusted bank balance | $8,962.60 |

| Book side | Amount |
|---|---|
| Balance in her books | $8,975.23 |
| Subtract bank fee | − $15.00 |
| Add interest | + $2.37 |
| Adjusted book balance | $8,962.60 |

Both sides are $8,962.60, so June is reconciled. Maya enters the fee and the interest in her books. She keeps the deposit and the check on a list, and checks that they clear in July.

## If you import your transactions

Many people import their bank's statement files instead of typing transactions. Then deposits in transit and outstanding checks mostly go away, because nothing is in your books until the bank posts it.

You still need to reconcile. A month can be missing or imported twice. An opening balance can be wrong. A line can go to the wrong account. On the statement's last day, your book balance must equal the statement's ending balance.

## When the numbers do not agree

Do not add a line called "adjustment" to hide the difference. Find the cause:

- Look for one line that equals the difference. It may be missing or entered twice.
- Divide the difference by 2. A line of that amount may be entered in the wrong direction.
- If the difference divides evenly by 9, look for two digits that are swapped, such as $54 typed as $45.
- Check lines near the start and end of the month. One may be in the wrong month.

Reconcile every month, not once a year. One month has few lines, so a difference is easy to find. Reconcile every account too: checking, savings and each credit card (see [how to reconcile a credit card statement](https://rightobooks.com/blog/how-to-reconcile-a-credit-card-statement/)). To fix categories after you reconcile, see [how to categorize bank transactions](https://rightobooks.com/blog/how-to-categorize-bank-transactions/).

## A tip for Righto users

Righto imports bank statements as CSV, OFX or PDF files. When you reconcile, you enter the statement's ending balance, and Righto shows the difference to the cent and the lines that are still open.

## Common questions

**Which side do I adjust?**
Adjust the bank side for timing items. Adjust your books for items only the bank recorded and for your own mistakes.

**What if the bank made the mistake?**
Do not change your books to match it. Call the bank. Keep the item on your list until a later statement shows the fix.

**Do I need to reconcile a savings account with few lines?**
Yes. It takes a minute, and it catches interest you did not record.

## What to do now

1. Choose one account and your most recent statement.
2. Check the beginning balance against last month.
3. Match each line, and list what only one side has.
4. Adjust both sides until they agree, then enter the missing items.
5. Put the next statement date in your calendar. Reconciling is also a step in the [year-end bookkeeping checklist](https://rightobooks.com/blog/year-end-bookkeeping-checklist/).

[Righto](https://rightobooks.com/download/) is free, easy to use and needs no account.

## Sources

- [Publication 583, Starting a Business and Keeping Records](https://www.irs.gov/publications/p583), IRS