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How it works

A bank reconciliation explains the gap between what your books say and what the bank says. The gap is never mysterious once it is itemised: it is made of cheques you have written that have not cleared, deposits that have not landed yet, and bank charges or interest you did not know about.

The two sides adjust in opposite directions, which is the part people get wrong. Items in your books but not on the statement adjust the bank balance. Items on the statement but not in your books adjust the book balance. Done correctly, both adjusted figures land on the same number — and if they do not, the residual is a genuine error worth chasing.

Adjusted bank = statement balance + items in books only · Adjusted book = book balance + items on statement only

  • Deposits in transit — money you have recorded that the bank has not yet credited
  • Outstanding cheques — payments you have recorded that have not yet cleared
  • Unrecorded items — charges, interest and direct debits the bank applied without your knowing

Worked example

A cash book closing at 486,200 against a statement closing at 495,700

Inputs

Book balance486,200
Bank balance495,700
Difference9,500

Results

Adjusted balance, both sides484,750
In books only3 items, −10,950
On statement only1 item, −1,450
Residual0.00

The 9,500 gap resolves fully into two outstanding cheques, a deposit in transit and a bank charge. Both sides land on 484,750, and a zero residual is what a completed reconciliation looks like.

Frequently asked questions

What format should I paste?

Copy straight out of a spreadsheet, or paste CSV. A header row is optional — columns are identified by their headings when present and by their content when not. Dates, references and amounts are detected automatically, and amounts may carry currency symbols, thousands separators or accounting parentheses.

What does a non-zero residual mean?

Something is genuinely wrong rather than merely outstanding: a transposed figure, a duplicated entry, a missing transaction, or a payment recorded at the wrong amount. Check the amount-mismatch table first — that is where transposition errors surface.

How should I handle bank charges the statement shows?

They belong in the "on statement only" list, and they need posting to your books. Until they are, your book balance overstates the cash you actually have.

My bank shows payments as negative and my books show them as positive.

Set the sign convention to flip the statement. Otherwise every payment will appear as an exception on both sides at once.

Is my ledger data uploaded anywhere?

No. Every line you paste is parsed and matched inside your browser. Nothing is transmitted to us, nothing is stored, and closing the tab discards it. That is the whole reason this tool exists in this form.

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