Bank reconciliation: explain the difference
Reconciliation is more than making two totals agree. It means being able to explain the timing differences and missing entries behind those totals. Try this short, fictional exercise before the full Academy lesson.
Start with two independent records
Choose one account and a statement ending date. Bring the bank statement and the matching activity in your books. Compare the same account, currency, and period. Keep a copy of the source statement with your reconciliation notes.
A matching amount alone does not prove two records belong together. Check dates, references, payment direction, and who paid whom. Keep uncertain matches in a review list.
Try the CycleWorks practice example
All amounts below are fictional teaching figures, not a customer result. Suppose the statement balance is $5,000 and the book balance is $5,230. A $250 customer deposit is recorded in the books but has not reached the statement. A $20 bank fee appears on the statement but has not been recorded in the books.
| Check | Calculation | Adjusted balance |
|---|---|---|
| Statement side | $5,000 + $250 deposit in transit | $5,250 |
| Book side | $5,230 − $20 bank fee | $5,210 |
The adjusted balances still differ by $40. That is the point of this exercise: finding two differences does not mean the reconciliation is complete. Keep investigating the $40, rather than adding an unexplained adjustment just to force a match.
Keep an exception list that someone else can follow
- State the unmatched amount and which record contains it.
- Identify the invoice, receipt, transfer, fee, or other source you checked.
- Separate timing items from entries that may need correction.
- Record the next question and who can answer it.
- Have an authorized person review proposed changes before they become official.
How the product supports the review
YourAILedger provides imported-statement reconciliation and evidence review workflows. Check current supported formats and features before selecting a plan. The public bank reconciliation software page includes an interactive preview with fictional records; your real records belong in your authenticated workspace.
Continue to the full lesson
The subscriber course includes the full learning experience and the CycleWorks training company. This public preview is a separate short exercise. Read the step-by-step reconciliation guide for a longer explanation of timing items and missing entries.
Common questions
Should I use a balancing entry to remove the $40 difference?
Investigate it first. An unexplained adjustment hides the issue instead of documenting a supported correction.
Does this page connect to my bank?
No. It uses fictional figures and does not access accounts or change records.
Continue learning with Allie
Course 4: Reconciliation and Closing. The full course requires an active paid subscription.
General education and product information. Fictional examples are labeled. Confirm accounting, tax, and legal matters with a qualified professional.