How to make bank reconciliation in your cash flow

how to do bank reconciliation using your cash flow
Excel Spreadsheets

Go back to:
What is and how to do Cash Flow?

In this article we will talk about:

What is bank reconciliation?

Bank reconciliation is the verification of the balance of your accounts in your control tool compared to your bank statement. Depending on the amount of financial transactions your company makes it can be done daily (at the beginning of the day, reconciling with the previous day) or in longer deadlines (at most monthly).

To make a good bank reconciliation you will need:

  • Tool to control all financial inflows and outflows (we recommend our reconciliation worksheet, which allows you to filter by bank accounts)
  • Bank statement of each of the accounts that your company owns

The idea is that you analyze each of the statements (if there are more than one) individually.

reconciliation worksheet

How to do bank reconciliation?

I believe that in 5 very simple and fast steps you can make your bank reconciliation with no problems. I used our reconciliation worksheet in excel, but any tool that generates a report with its entries of entries and exits by bank account is enough:

1. Record your income and expenses on a daily basis

To begin with, you need to pay attention to your daily releases by properly recording the entries and exits that have occurred. Assuming we have an initial balance of R $ 50.000, this would be the 15 preview of postings made during the 10 the first days of the month of January:

how to make bank reconciliation using your cash flow - launches

As you can see, with each launch held our balance is being modified, resulting in a cumulative of $ 19.566. Now, how do you know what you are analyzing in your spreadsheet cash flow that's right?

How to make bank reconciliation in your 1 cash flow

2. Analyze your bank statement

Only with the analysis of your bank statement that it will be possible to make this comparison and make sure that all the data released is correct. Here is one of the simplest parts of bank reconciliation, just download a file with your computer bank statement and analyze it directly on the screen or print, if you prefer. Below I show a fictitious example of extract:

how to do bank reconciliation using your cash flow - fictitious bank statement

If you already have this document in hand, now it's time to take the next step and make the comparisons due.

3. Compare the balance of your statement with your cash flow

Before entering the comparison line by line (which may be necessary) it is worth looking at the main balances:

how to make bank reconciliation using your accumulated cash flow

  • In bank statement - R $ 31.716

reconciliation worksheet

Clearly there is a difference of R $ 12.149 less in our cash flow. Usually this scenario is better than the opposite, since here we have more money in reality than in our internal control. It can be a big problem to believe that you have more capital than you actually have in your bank account.

That is why this moment is essential, and if we find that in initial conciliation there are discrepancies, we need to analyze line by line to find where the error is.

4. If there are inconsistencies, make the bank reconciliation for each posting.

In this case, open your control documents at the same time (spreadsheet cash flow and bank statement) and go analyzing one by one. Here in our example I marked with a green dot what was exactly like our extract and highlighted in red what I found different:

how to do bank reconciliation using your cash flow - analyze by launch

Okay, we found the error, instead of R $ 13.500 I had released R $ 1.350. A zero that could have cost us a lot of money.

As the work of filling out a cash flow is very operational and involves a number of categorizations (account plan, form of payment, bank account, payment status, value, etc.), it is quite possible to have errors due to simple errors.

5. When you find the difference, just correct

Now that we're getting to the end of our bank reconciliation, just make the corrections and see if the accumulated balances are hitting. In our case, when correcting the revenue launch for R $ 13.500 we have reached the correct level and the reconciliation has hit, see:

how to make bank reconciliation using your cash flow - corrected launches

Now just keep records of the documents (invoices, bank statements, receipts, extracts, etc.) to be able to send everything correctly to your accounting.

reconciliation worksheet

Bank Reconciliation with a Cash Flow Worksheet

Throughout the post I used our spreadsheet cash flow and reconciliation worksheet to monitor the launches in relation to the bank statement and also to analyze the accumulated values ​​in a simple and objective way using only one page of our tool.

I hope it helps you and that you never get past it because you have less money from the bank than your financial tool was indicating.

How to make bank reconciliation in your 1 cash flow

Excel Spreadsheets


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