How To Perform Bank and Credit Card Reconciliation
Before you reconcile your monthly bank or credit card statement, check your own figures. Begin with the balance shown in your books at the end of the previous month.
Compare the deposits listed on the bank or credit card statement with the deposits shown in your accounting software. Note all differences in the dollar amounts.
Compare each canceled check, including both check number and dollar amount, with the entry in your books. Note all differences in the dollar amounts. Mark the check number in the accounting software as having cleared the bank. After accounting for all checks returned by the bank, those not marked in your accounting software are your outstanding checks.
Prepare a bank reconciliation.
Update your accounting software for items shown on the reconciliation as not recorded (such as service charges) or recorded incorrectly.
At this point, the bank statement balance should equal the balance shown in your accounting software.
If the result does not agree, you may have made an error in recording a check or deposit. And further investigation needs to be conducted to find the root cause of the discrepancies.