HOW TO RECONCILE YOUR CHECKING ACCOUNT
Failure to reconcile your checking account can cost you money over time. If either you or the bank make any errors, they might not be discovered in a timely fashion unless you reconcile your account on a monthly basis. If the bank deducts more for a check than the amount written or does not credit your account for a deposit made, you need to let it know about these errors in a timely manner or it will not do anything about them. Similarly, you could have made a mistake and assumed that your balance was higher than it really was, which could result in an overdrawn check, which in turn would result in additional bank fees.
The starting point in reconciling your checking account is to examine your monthly checking account statement. The bank statement shows the deposits that have been credited and the checks that have cleared the account for the monthly period.
Canceled checks or copies of them are included with your monthly bank statement. In addition to marking off canceled checks, you should also check the amounts that the bank has debited for each check. The amount charged by the bank is shown in the bottom right-hand corner of the check you wrote.
DM = Debit Memo SC = Service Charge FC = Finance Charge IN = Interest that check. This way bank errors can be spotted promptly and then corrected when brought to the bank’s attention.
Arrange checks you have written that have cleared the bank in numerical order of check numbers and then mark them off in your check register.
You should check off all the ATM withdrawals that are listed on the bank statement against your checkbook register. Determine Your Adjusted Checkbook Balance .Begin with your checkbook balance at the closing date of the monthly statement, add interest income, and then deduct bank charges and fees.
Balance per checkbook at end of month $4,877.90
Deduct: service charge (5.10)
Add: interest income 1.50
Adjusted checkbook balance $4,874.30
Compare the Deposits Listed on Your Bank Statement with the Deposits in Your Register.
Determine whether there are any deposits that you have recorded in your checkbook that are not on your bank statement. Looking at the checkbook register.
If you still have not found the error, it is more than likely that you are overlooking something obvious. Leave it for a while and come back to it later.
Computers can be used to reconcile a checking account, which eliminates the arithmetic errors that can so easily be made when determining checkbook register balances. There are many different software programs available. Here thesteps to reconcile your checking account using Quicken software. For other software programs, consult the software guide for the speci.c steps to reconcile your account.
There is a basic similarity between manually reconciling your account and doing it on a computer. The advantage of using a computer is that reconciling your account is much easier because arithmetic errors are eliminated. The disadvantage is that it is time consuming to enter the transactions from your paper checkbook register into the computer checkbook register.
By reconciling your checking account monthly, you confirm that your checking account balance is what it should be, and you safeguard an important asset:your cash.
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