Bank Reconciliation

Bank reconciliation is the process of matching your internal accounting records with your bank's statements to ensure they agree. This helps you identify discrepancies, catch errors, find missing transactions, and maintain accurate financial records.

Accessing Bank Reconciliation

Navigate to Dashboard > Accounting > Treasury > Reconciliation.

How Bank Reconciliation Works

The reconciliation process compares two sets of data:

1. Book transactions -- The deposits and withdrawals recorded in your DirectSale treasury module.
2. Bank statement lines -- The transactions reported by your bank on your statement.

The goal is to match each bank statement line to a corresponding book transaction, confirming that both records agree.

Reconciliation Workflow

Select a Bank Account

At the top of the page, choose the bank account you want to reconcile from the dropdown. The dropdown lists all your configured treasury/bank accounts.

Import a Bank Statement

Click the Import Statement button to upload your bank statement. The system parses the statement and creates individual statement lines. Each line contains:

Field	Description
Date	The date of the transaction as reported by the bank.
Description	The transaction description from the bank statement.
Amount	The transaction amount (positive for deposits, negative for withdrawals).
Reference	Any reference number provided by the bank.

Review Statement Lines

After import, each statement line appears in the reconciliation view with one of three statuses:

Status	Badge Color	Description
Matched	Green	The statement line has been matched to a book transaction.
Unmatched	Yellow	The statement line has not yet been matched to any book transaction.
Excluded	Gray	The statement line has been excluded from reconciliation (e.g., it is a bank fee already accounted for separately).

Match Transactions

There are two ways to match statement lines to book transactions:

Auto-Match

Click the Auto-Match button. The system automatically attempts to match statement lines with book transactions based on:

• Amount (exact match)
• Date (same or close dates)
• Reference numbers (if available)

Successfully matched pairs are marked as "Matched".

Manual Match

For lines that could not be auto-matched:

1. Click on an unmatched statement line.
2. The system shows potential matching book transactions.
3. Select the correct book transaction to create the match.
4. The statement line status changes to "Matched".

Handle Unmatched Lines

For statement lines that have no corresponding book transaction:

Action	Description
Create Transaction	Create a new book transaction from the statement line. This is useful for bank-initiated transactions (fees, interest) that were not previously recorded.
Exclude	Mark the line as excluded if it should not be part of the reconciliation (e.g., a pending transaction that reversed).
Leave Unmatched	Keep it unmatched for now and investigate later.

Unmatch

If a match was made incorrectly, click the Unmatch button on a matched pair. Both the statement line and the book transaction return to their unmatched state.

Review the Reconciliation Summary

At the bottom of the page (or in a summary panel), the reconciliation summary shows:

Field	Description
Book Balance	The balance according to your internal records (sum of all book transactions).
Statement Balance	The balance according to the bank statement (sum of all statement lines).
Difference	The difference between the book balance and statement balance. When reconciliation is complete, this should be zero.
Matched Count	The number of statement lines that have been matched.
Unmatched Count	The number of statement lines still unmatched.

Info: A successful reconciliation has a zero difference between the book balance and statement balance, with all statement lines either matched or excluded.

Understanding the Reconciliation View

The reconciliation page is divided into sections:

Statement Lines Section

Shows all imported bank statement lines with their match status. Each line displays the date, description, amount, reference, and status badge.

Actions per Line

Action	When Available	Description
Match	Unmatched lines	Opens the manual matching interface to pair with a book transaction.
Unmatch	Matched lines	Removes the existing match, returning both sides to unmatched status.
Exclude	Unmatched lines	Marks the line as excluded from reconciliation.
Create Transaction	Unmatched lines	Creates a new treasury transaction from this statement line.

Common Reconciliation Scenarios

Bank Fees Not Recorded

If the bank charged a fee that you have not recorded:

1. Find the fee line in the statement (unmatched).
2. Click Create Transaction to add it to your books.
3. The system creates a withdrawal transaction and the line becomes matched.

Timing Differences

Checks you have written may not have cleared the bank yet, or deposits may be in transit:

• These appear as unmatched book transactions (no corresponding statement line).
• This is normal and expected. They will match in a future reconciliation period.

Duplicate Transactions

If the same transaction appears twice:

1. Match the correct occurrence.
2. Exclude the duplicate.

Amount Discrepancies

If the amounts do not match exactly (e.g., due to currency conversion fees):

1. Match the closest transaction manually.
2. Create a separate adjustment journal entry for the difference.

Tips for Effective Bank Reconciliation

• Reconcile regularly -- Monthly reconciliation is the minimum. Weekly is better for high-volume businesses.
• Start with auto-match -- It saves significant time. Then handle the remaining unmatched items manually.
• Investigate all discrepancies -- Do not exclude lines without understanding why they do not match.
• Keep the difference at zero -- A non-zero difference at the end of reconciliation means there is an error somewhere.
• Use references -- When recording payments and creating transactions, include reference numbers. This dramatically improves auto-match accuracy.
• Reconcile in chronological order -- Start with the oldest unreconciled statement and work forward.

Warning: Bank reconciliation is a critical internal control. Skipping reconciliation or leaving persistent unmatched items can mask errors, fraud, or missing transactions. Make it a regular part of your accounting workflow.