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One of the responsibilities of owning a checking account is keeping it up-to-date. This includes recording each transaction, keeping a running balance in your checkbook, and reconciling your checkbook balance with the with the bank’s checking account statement each month.
The reconciliation process is simple if approached in a step-by-step fashion. To balance, or reconcile, your checkbook:
1.) Put your checkbook and bank statement side-by-side. Armed with a writing implement, match each line item on the statement with the corresponding line in your checkbook. As you go down the list, place a small check in your checkbook beside each item.
2.) Once you have reviewed all items on the statement, note any entries that are missing from your checkbook such as fees, interest earned, or forgotten ATM withdrawals. Add/subtract these items from your checkbook balance.
3.) On a piece of paper or a form often provided on the back of your bank statement, list all outstanding deposits you made after the statement closing date and add them together. Do the same for outstanding checks that you have written but have not yet cleared the bank.
4.) Finally, write down the balance shown on the checking account statement. Subtract from that figure your total outstanding checks and add total outstanding deposits.
If you are very accurate and lucky, the resulting figure will match the balance in your checkbook. If you are like me, it NEVER matches. Technically, you then go back through your checkbook and checking account statement line-by-line until you figure out the problem. If I am off by only a few dollars and do not see anything amiss with my checking account statement, however, I just add an extra line in my checkbook called ESP (error someplace) and list a debit or credit to make the checkbook balance. It saves me a lot of stress and time.
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