A monthly bank statement will tell you all of the transactions in your bank account for that month as recorded by your bank. When your bank statement arrives, look it over carefully. Familiarize yourself with its content. You will want to reconcile your checkbook using your bank statement. Reconcile means that you use two sets of records (bank statement and check register) to verify the transactions in the account. It is a good idea to complete the reconciliation as soon as possible to avoid dealing with additional outstanding checks. Outstanding checks are those that have been written but have not yet been processed by your bank.

If you do not reconcile your bank statement, you run the risk of not knowing how much cash you have in the bank and you could write a check with insufficient funds. Having a check not clear your bank because of insufficient funds is very costly. It can cost $20 or more each time.

Have your checkbook balance current because it will “match” the one you derive from reconciling your statement. Check off each item whether it is a check or a deposit in my checkbook, on the bank statement, and on the photocopy of your checks. After doing this, enter the transactions from your checkbook but which are not reflected on the statement on the reconciliation form. These include checks written but not yet processed by the bank and deposits made but not yet processed by the bank. Also enter the balance the bank reflects on the statement.

Statement balance:

+ deposits made but not reflected on the statement
– checks written but not processed by the bank must
= the balance in your checkbook.

Click through this slideshow to learn more about reconciling a checkbook.

How to Reconcile a Checkbook To reconcile a checkbook you will need your check register, your monthly bank statements, a pen or pencil, a calculator, paper and any receipts that you have not recorded yet for that month. Step 1 Make sure your check register is up to date by recording all transactions, including those that may not be on the monthly statement, yet. Step 2 Get your monthly bank statement that you received in the mail. If you are paperless, download your monthly statement online. Step 3 Look at your statement to see which withdrawals (Checks, ATM, Debit Card, etc.) have cleared and check them off in your check register. Be sure to add any transactions that are on your bank statement but not in your register to your register. In the sample shown below, checks 2361 and 2364 have not cleared with the bank yet, which is why there is no check. Step 4 Verify the deposits listed on the statement are recorded on your check register. If they are not add them to the register. In the sample shown below, a deposit of $1,000 was made on the first of the year. This was the only deposit of the month and appeared on the bank statement, so nothing additional will be added to the check register. (Click on the image to see a larger version) Step 5 Check your bank statement for any other transactions such as interest added to your account or bank fees deducted from your account and record them in your check register. Step 6 Once everything has been checked it is time to make sure it is all balanced. To see if your checkbook is balanced take your statement balance and add outstanding deposits to it, then subtract outstanding checks and debits. This should equal your current check register balance.

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