Your reconciliation balances.Are the books right?

A zero difference on a bank reconciliation feels like the end of the job. It means the cash account and the bank statement agree. It does not mean every transaction behind that number is right.

A reconciliation compares one account to one outside record. It checks the total, not the story. Here is what can still be hiding underneath, and what to look at before you sign off.

What a balanced rec can still hide

1. Miscoded transactions. A payment posted to the wrong expense account still clears the bank. Cash is right, the profit and loss is not.
2. Errors that cancel out. A duplicated entry and a missing one of the same size leave the difference at zero.
3. Stale outstanding items. A cheque that has sat uncleared for months may be lost, voided or never sent.
4. A plug. A small adjusting entry made just to force the difference to zero, with no support behind it.

Five checks before you call it done

1. Confirm the opening balance matches last month’s reconciled ending balance.
2. Read the list of outstanding items, and ask about anything older than a couple of months.
3. Look for adjusting entries without a note or a document attached.
4. Scan the period’s activity for odd coding, such as a large payment in a small account.
5. Tie the reconciled balance to the balance sheet you are about to report.

Sample text for the layout. The real post comes from Substack, and examples on the site are illustrative.