What is a bank reconciliation?

A bank reconciliation compares the cash balance in your accounting records with the balance on your bank statement, and explains every difference between the two. It is not busywork. It is the control that catches missing transactions, duplicate payments, unrecorded fees and errors — usually before they matter.

How often should I reconcile?

Monthly, at a minimum. If you are registered for GST and lodge quarterly, reconcile each month before preparing the BAS. Annual reconciliation is far more work than twelve monthly ones, because errors compound and old bank statements get harder to obtain.

Why won't my reconciliation balance?

Work through four causes in order: deposits in transit, unpresented payments, bank items you have not recorded, and errors in the books. One useful trick — if the difference divides evenly by nine, you are probably looking at a transposition, where 54 was typed as 45. If it is exactly twice a transaction you can see, something has been entered on the wrong side.

Should I use the statement balance or the app balance?

The statement. The balance shown in a banking app often includes pending transactions the statement has not yet closed, so reconciling to it produces a difference that is not really a difference. Use the closing balance of the statement period you are reconciling.

What do I do with the bank fees I find?

Record them in your ledger. They are real expenses that happened — the reconciliation only revealed them. Most bank fees are input taxed or GST free rather than carrying a GST credit, so check the code before claiming GST on them. In our general ledger template the bank fees account defaults to FRE for that reason.

Do I still need to reconcile if I use Xero or MYOB?

Yes. A bank feed imports transactions, it does not confirm your books are complete or correctly coded. Matching a feed is not the same as reconciling to a statement balance. Software makes it much faster, and it is worth doing there rather than in a spreadsheet once your volume justifies it — see how timesheet and payroll data flows into Xero.

How long do I keep the reconciliations?

Keep them, and the bank statements behind them, for at least five years — the same rule that applies to the rest of your business records under ATO requirements.

FREE EXCEL TEMPLATE Last updated 28 August 2026

Bank reconciliation template that has to balance

Prove the cash figure in your books matches the bank, and account for every dollar of difference. The difference line is a formula — it reads $0.00 when the reconciliation is right and stays visibly wrong until it is.

Bank reconciliation template

Excel (.xlsx) · 2 sheets · no signup

Difference line that must read $0.00

Deposits in transit and unpresented payments built in

Space for bank fees and interest you have not recorded

Works for any Australian bank account

General information only, not tax or accounting advice.

This template is general information for Australian businesses. How you treat a particular item depends on your circumstances — confirm with your accountant or a registered BAS agent. It does not constitute legal, HR, or professional advice and should not be relied on as a substitute for advice specific to your business, workforce, or circumstances.

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What's in the bank reconciliation template

One sheet, worked top to bottom, ending in a figure that must be zero.

Instructions sheet

What a reconciliation proves, the four things that normally explain a difference, and why doing it monthly costs less than doing it yearly.

Balance per bank

The closing balance from the statement — not the app balance, which usually includes transactions the statement has not closed.

Deposits in transit

Money you have banked that the bank has not cleared yet. Eight rows, totalled automatically.

Unpresented payments

Payments you have issued that the payee has not banked yet. The single most common cause of a difference.

Bank items not in your books

Fees, interest, merchant charges and direct debits that hit the account without ever passing through your ledger.

The difference line

Adjusted bank balance less adjusted book balance. It is a formula. If it is not zero, something above it is missing.

How the reconciliation resolves

Both sides get adjusted, then they have to meet.

Step	What goes here	Example	Effect
Balance per bank statement	Closing balance from the statement	$18,420.00	Starting point
Add deposits in transit	Banked, not yet cleared	+ $2,150.00	Increases bank side
Less unpresented payments	Issued, not yet banked by payee	− $3,610.00	Decreases bank side
Adjusted bank balance	Formula	$16,960.00	Must equal the book side
Balance per your books	Cash at bank in the ledger	$16,835.00	Your side
Add bank items not recorded	Fees, interest, direct debits	+ $125.00	Increases book side
Difference	Formula	$0.00	Reconciled

The $125 in the example is a merchant fee that never reached the ledger. Finding it is the point of the exercise — not the paperwork.

The four things that explain a difference

A reconciliation that will not balance is almost always one of these. Work through them in order.

Timing on your side

Deposits in transit and unpresented payments. Real transactions the bank simply has not processed yet. These clear themselves next month.

Timing on the bank's side

Fees, interest, merchant charges and direct debits the bank applied without telling you. These need entering into your books, not adjusting out.

An error in the books

A transposed figure, a duplicate, a payment entered twice or coded to the wrong account. Look for a difference divisible by nine — that is the signature of a transposition.

Something genuinely wrong

A payment nobody authorised, a duplicate supplier payment, a transaction that should not exist. Rare, but reconciling monthly is how it gets found in weeks rather than years.

Reconcile before the BAS, not after

If you are registered for GST and lodging quarterly, reconcile each month of the quarter before you prepare the business activity statement. A BAS built on unreconciled books is a BAS you will probably have to revise.

How to do a bank reconciliation

The same four steps whether you use this template or software.

1. Get the closing balances

The bank statement closing balance, and the closing balance of the cash-at-bank account in your books. Use the statement, not the app.

2. Tick off what matches

Work down both sides marking off transactions that appear on each. What is left unmatched is what you are explaining.

3. Explain the leftovers

Put each unmatched item into the right list — in transit, unpresented, or a bank item you need to record.

4. Get to zero

The difference line must read $0.00. Then record the bank items in your ledger so next month starts clean.

Who uses a bank reconciliation template

Small businesses without accounting software

Where the bank feed does not exist and matching happens by eye, a structured sheet is what stops items being missed.

Bookkeepers on a new or messy file

Reconstructing a period from statements before deciding whether the file is salvageable.

Anyone preparing a BAS or year end

Reconciled cash is the precondition for reporting anything with confidence.

For accountants & bookkeepers

Do you reconcile the books for shift-based businesses?

Wages are usually the largest line you reconcile, and the hardest to check — penalty rates, casual loading and public holidays make the bank figure hard to predict. Advisors who bring shift-based clients onto RosterElf earn recurring monthly income per employee managed.

Recurring monthly income

$1.00–$2.00 per active employee

Signup bonus

$100 per new client business

Tiered rates

Bronze through Diamond

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Definitions

Plain-English explanations of the terms used on this page.

FAQ

Bank reconciliation questions

A bank reconciliation compares the cash balance in your accounting records with the balance on your bank statement, and explains every difference between the two.

It is not busywork. It is the control that catches missing transactions, duplicate payments, unrecorded fees and errors — usually before they matter.
Monthly, at a minimum. If you are registered for GST and lodge quarterly, reconcile each month before preparing the BAS.

Annual reconciliation is far more work than twelve monthly ones, because errors compound and old bank statements get harder to obtain.
Work through four causes in order: deposits in transit, unpresented payments, bank items you have not recorded, and errors in the books.

One useful trick — if the difference divides evenly by nine, you are probably looking at a transposition, where 54 was typed as 45. If it is exactly twice a transaction you can see, something has been entered on the wrong side.

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