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The Bank reconciliation template reconciles an individual bank account by agreeing the trial balance figure to the balance shown on the bank statement, adjusting for any unpresented payments or receipts, and evidencing the reconciliation with attached bank statements and supporting documents. It also picks up any overdraft facility on the account and, if a difference remains once every adjustment has been made, gives you a space to explain it.

Table of contents 

When should I use this template?

Use it for every bank account that needs reconciling to its bank statement at each period end. It's applied automatically to accounts that fall within your practice's bank account mapping, so in most cases you won't need to attach it manually. If an account isn't showing it, you can assign the template to that account yourself.

Before you start

Have the client's bank statement for the period end to hand (for the closing balance and to attach as evidence), details of any payments or receipts recorded in the accounting records that hadn't cleared the bank by the period end, and evidence of any overdraft facility if the account is overdrawn.

Background

This is a working paper rather than a disclosure note. It supports and evidences the bank balance shown in the trial balance, and isn't shaped by any particular accounting standard.

Steps

  1. Currency.Select the currency the bank statement is denominated in: GBP, EUR, USD, or Other. This defaults to the company's own currency, so most users can leave it as is.
    • Choosing Other opens a free-text box, where you type in the currency's name.
    • The exchange rate step. If you select a currency different from the company's own, an Exchange rate field appears (with room to attach evidence of the rate used). Enter the rate and the template automatically converts the bank statement balance into the company's own currency for the rest of the reconciliation. The reconciliation can't complete for a foreign-currency account until this is entered.
  2. Bank reconciliation as at. Enter the date the reconciliation is being prepared as at. This defaults to the period end date.
  3. Balance as per bank statement. Enter the closing balance shown on the bank statement, and attach the statement itself (or any other supporting document).
  4. Less: unpresented payments. List any payments recorded in the accounting records that hadn't cleared the bank by the statement date: a description, a value, and an optional attachment for each. Add as many lines as you need; pressing Enter (or saving) on the last line opens a new one automatically.
  5. Add: unpresented receipts.The same idea, for receipts not yet shown on the bank statement, except that these are added rather than deducted.
    • Once you've entered any unpresented payments or receipts, a Total balance appears automatically: the bank statement balance, less unpresented payments, plus unpresented receipts.
  6. Overdraft facility. This section appears automatically if you attach a document to it, enter a facility figure, or the account balance is negative. Enter the facility limit and attach evidence of it. The template works out the amount left available automatically (the full facility if the account is in credit, or the facility less the overdrawn amount if it isn't).

Once the total balance is worked out, the template compares it to the trial balance automatically and shows a green reconciled indicator once the two are within 99p of each other. By default that comparison is made to the nearest pound; your practice's template administrator can configure a file to compare to the nearest penny instead where that's needed.

If a difference remains after all of the above, an Explanation of differences section appears automatically. Enter a description and a value for each difference you can identify, and attach any supporting evidence. Remember to enter a minus sign where a value should reduce rather than increase the balance, as the template doesn't apply this for you. The balance recalculates as you go, and the reconciled indicator re-checks itself against this final, explained balance.

What flows through to the rest of the accounts/workflow?

The reconciled total balance from this template feeds the corresponding row on the Bank reconciliation summary template automatically, along with whether this account has fully reconciled, so an account only shows as explained on the summary once it's reconciled here, or the difference has been separately confirmed as explained on the summary itself.

What rolls forward next year?

When you copy data into the next period, the bank statement balance, the exchange rate, and the overdraft facility figure are all cleared and need re-entering, since they relate to a specific statement or facility position rather than something that carries on unchanged. The currency selection, the unpresented payments and receipts you've entered, and the reconciliation date carry forward as a starting point, ready to be reviewed and updated for the new period.

Where the data comes from

The trial balance value being reconciled comes directly from the account itself. Everything else on the template (the bank statement balance, unpresented items, exchange rate, overdraft details, and any explanation of differences) is entered manually from the bank statement and the client's records, and none of it is pulled in from elsewhere.

Frequently asked questions

Why can't I see the exchange rate field?

It only appears once you've selected a currency other than the company's own.

Why has the overdraft section appeared even though I haven't entered anything?

It shows automatically whenever the account balance is negative, so an overdrawn account always prompts you to record the facility details. If you expect to see it and don't, some practices configure this section to be hidden across all files, so check with your template administrator.

The green dot hasn't appeared even though my figures look right. Why?

Check whether your practice compares to the nearest pound or the nearest penny. A small rounding difference under whichever threshold applies won't show as unreconciled, but anything above it will, however small.

Can I add more than one explanation of the difference?

Yes. Each line in the Explanation of differences section is its own entry, so list each item separately with its own value.