Common Bank Reconciliation Errors and How to Fix Them
A bank reconciliation that will not balance is frustrating, but the cause is usually one of a short list of errors. Working through them in order is faster than searching transaction by transaction.
The steps below apply to QuickBooks Online and Xero. For a full walkthrough of the reconciliation screen itself, see how to reconcile bank accounts in QuickBooks Online.
1. The opening balance does not match the statement
If the beginning balance in your software differs from the opening balance on the bank statement, a previously reconciled transaction has been changed, deleted or un-reconciled. Fix this before anything else, because every later month will be off by the same amount.
How to fix it: run the reconciliation discrepancy or history report, find transactions edited after the last reconciliation, and restore them to their original amounts or dates.
2. Duplicate transactions
Duplicates appear when a bank feed imports a transaction that was also entered by hand, or when a statement is imported twice. They usually make the book balance lower than the bank for payments, or higher for deposits.
How to fix it: sort the unreconciled list by amount and look for pairs with the same value a few days apart. Match one to the bank line and delete or void the other.
3. Transactions in the wrong period
A payment dated December 31 in your books might clear the bank on January 2. That is a normal timing difference, and it stays uncleared until the next statement. Problems start when the date was simply typed wrongly, so the item never matches.
How to fix it: review uncleared items older than one statement period. Genuine timing differences clear the following month; anything older usually has the wrong date or amount.
4. Transposed or mistyped amounts
If the difference divides evenly by 9, a transposition such as $1,450 entered as $1,540 is a likely cause. If the difference is exactly twice a transaction amount, a deposit may have been recorded as a payment, or the reverse.
5. Bank fees and interest not recorded
Monthly service charges, wire fees and interest earned often appear only on the statement. Add them before you reconcile.
6. Deposits recorded gross instead of net
Card processors and platforms such as Stripe, Square, Shopify and Amazon deposit sales after deducting fees and refunds. If you recorded the gross sales as the deposit, the bank will show less. Record the gross sale, the fees and any refunds separately, so they net to the actual deposit. A clearing account makes this easier to manage.
7. Transfers recorded on one side only
A transfer from checking to savings must appear in both accounts. If it was recorded as an expense in one account and missing in the other, both reconciliations will be wrong.
8. Forced reconciliations
Some software lets you finish a reconciliation with a difference by posting an adjustment. This hides the problem rather than fixing it. Search for “reconciliation discrepancy” or similar adjustment entries and investigate each one.
Quick diagnostic order
- Check the opening balance.
- Look for duplicates.
- Add missing fees and interest.
- Test the difference for transpositions or reversed entries.
- Review old uncleared items.
- Check processor deposits and transfers.
Our free Bank Reconciliation Checker runs these tests on your figures, and the CSV Financial Analyzer can flag possible duplicates and transfers in a bank export.
Several months of unreconciled accounts usually need a structured cleanup. AccoTiva also provides ongoing bank reconciliation services for businesses in the United States and Canada.