Bank reconciliation procedure
SOP template
| SOP no. | Version | Effective date | |||
|---|---|---|---|---|---|
| Owner | Approver | Review date |
Purpose
To make sure every bank account in the books agrees with the bank statement, and that differences are found, explained and fixed promptly.
Scope
Every business bank account, credit card and loan account the practice keeps books for, reconciled at least monthly.
Responsibilities
| Role | Responsibility |
|---|---|
| Bookkeeper | Reconciles each account, investigates differences and prepares the report. |
| Reviewer | Checks the reconciliation, the old items and any adjustments, and signs it off. |
| Client | Answers questions about unknown transactions and provides missing receipts. |
Definitions
- Unreconciled item
- A transaction on the statement but not in the books, or in the books but not on the statement.
What you need
- Bank statements or a live bank feed
- The accounting software
- The client query list
Procedure
Get the statement
Download the statement for the period, or check the bank feed is complete up to the statement’s closing date.
Match the transactions
Match each statement line to a transaction in the books, or code it to the right account.
Caution: Don’t code anything you are unsure of to a general expense account. Park it in a suspense account and ask the client.
Check the balances agree
The reconciled balance in the books must equal the statement’s closing balance. If it doesn’t, look for duplicates, deleted transactions and wrong dates.
List unreconciled items
List every outstanding item with its date and amount, and why it is still open.
Query the client
Send the client a list of unknown transactions and missing receipts, and record their answers.
Review and sign off
The reviewer checks the report, any items older than one month and any adjustment, then signs it off.
Records
- The reconciliation report for each account and period, signed by the reviewer.
- The client query list and answers.
Related documents
- Month-end close checklist
- Workpaper review procedure
Revision history
| Version | Date | What changed | Approved by |
|---|---|---|---|
