A bank reconciliation statement (BRS) explains the difference between the bank balance in a business’s cash book and the balance on the bank statement on the same date, item by item, until both agree. Done once a month, it finds an unauthorised debit or a duplicate payment weeks after it happened, when nobody remembers why.
In OneFinOps, the Banking Agent matches statement lines as they settle.
Key takeaways
- A BRS explains, line by line, why cash book and bank differ.
- Timing differences clear next month; charges and direct entries need posting.
- Reconcile every bank account at least monthly, and never plug a difference.
Why do the cash book and bank balance differ?
| Cause | What happened | Bank balance vs cash book |
|---|---|---|
| Cheques issued, not presented | You recorded the payment; the payee has not deposited it | Bank higher |
| Cheques deposited, not credited | You recorded the receipt; the bank has not cleared it | Bank lower |
| Bank charges and GST | Bank debited fees you have not recorded | Bank lower |
| Interest credited | Bank credited interest you have not recorded | Bank higher |
| Direct receipts (NEFT, RTGS, UPI) | A customer paid straight into the account | Bank higher |
| Direct debits (NACH, ECS) | Loan EMI or premium auto-debited | Bank lower |
| Dishonoured cheque | A deposited cheque bounced | Bank lower |
| Errors | Wrong amount, wrong account, duplicate entry | Either way |
Moving from cash book to bank, add what made the bank higher and deduct what made it lower. For an overdraft account, reverse the signs.
How to prepare a bank reconciliation statement
- Take both balances at the same date, usually month end.
- Tick off matches by amount, date and reference (cheque number, UTR).
- List what is left on each side.
- Post the statement-side items: bank charges with GST separately, direct receipts against the right customer, EMIs against the loan.
- Prepare the BRS and have it reviewed. Chase cheques near expiry; under RBI instructions a cheque is generally valid for three months from its date.
Bank reconciliation statement example
Mehta Traders Pvt Ltd, 31 August 2026:
- Cash book balance: ₹4,85,000.
- Add: cheques issued not presented ₹1,55,000, interest ₹2,400, NEFT from Kapoor Retail ₹50,000.
- Less: cheque deposited not credited ₹90,000, bank charges ₹1,180 (₹1,000 plus ₹180 GST), loan EMI ₹25,000.
- Balance as per bank statement: ₹5,76,220. True cash for the balance sheet is ₹5,11,220; post the ₹180 GST to an input tax ledger.
How OneFinOps handles bank reconciliation
The Banking Agent pulls transactions from every connected account as they settle and matches each line to the payment, receipt or journal behind it, including batched settlements where one credit clears many invoices. Lines it cannot match are classified and aged, each with an owner.
For charges and interest, it drafts the journal with the statement line attached, and the controller approves before it posts. A statement line with no document behind it goes to the financial controller.
Accounting software that records entries still leaves the tick-off to a person at month end. Here the book to bank difference is a named list rather than a number.
See how the Banking Agent works
