Bank Reconciliation

Bank reconciliation is the process of comparing your bank statement against the transactions recorded in your General Ledger. You enter the ending balance from your bank statement, then mark off (clear) each GL transaction that appears on the statement. When the difference between the statement balance and your cleared items reaches zero, your books agree with the bank and you can finalize.

Regular reconciliation catches data-entry errors, identifies missing transactions, and ensures your Balance Sheet accurately reflects your cash position.

Who is this for?

Bookkeepers and business owners who need to verify their books match their bank statements each month.

Prerequisites

• A company created in Addsworth Accounting (see Getting Started with Addsworth Accounting)
• At least one bank account set up and linked to a GL account
• Posted journal entries that affect the linked GL account (entered by hand or imported from a CSV file)
• Your bank statement for the period you intend to reconcile

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Reconcile on your Mac or iPad. An iPhone reads the accounts, the badges and the bank register, and changes nothing.

Why Reconcile?

Your bank statement and your books rarely match on their own. Timing differences, missed entries, bank fees, and data-entry errors all contribute to discrepancies. Reconciliation resolves these differences so your financial statements reflect reality.

Items that commonly cause mismatches:

• Outstanding cheques: Cheques you have issued and recorded but the bank has not yet cleared.
• Deposits in transit: Deposits you have recorded but the bank has not yet posted.
• Bank fees and interest: Charges or credits applied by the bank that may not yet appear in your books.
• Data-entry errors: Incorrect amounts or duplicate entries in either the bank feed or the GL.

Tip: Reconcile at least monthly, shortly after receiving your bank statement, so discrepancies are caught while the details are fresh.

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Managing Bank Accounts

Opening the Bank Accounts List

Navigate to Banking from the sidebar. The Bank Accounts screen lists all bank accounts for the active company. Each row shows:

• Account name (with an "Inactive" badge if the account is archived and a "Reconciling" badge if a draft reconciliation is in progress)
• Financial institution name and routing number (transit-institution format, e.g. 12345-382)
• Account number
• Linked GL account name (shown as a blue link, e.g. "GL: 1010 - Cash - Operating")
• Last reconciled date, if any

Tap a row to open the bank register. To open the editor, right-click or long-press the row and choose View Details. The list also supports the following actions:

Archive, delete and unarchive on your Mac.

Archived Bank Accounts

An archived bank account is hidden from the Bank Accounts list, from every account picker, and from the bank transaction import. Its transactions stay on the books and its linked GL balance is unchanged.

• Turn on Show Archived in the toolbar to list archived accounts beside the live ones. They are drawn in secondary text and still open their editor.
• To bring one back, choose Unarchive on the row, or open its editor and turn Active back on.
• An account cannot be unarchived while the GL account it posts to is itself archived or inactive. Restore the GL account first; the message names it.

Tip: If no bank accounts appear, tap the + button in the toolbar to add one.

Reading the Bank Register

Tap a bank account row to see what moved through the account. The summary shows Opening Balance, Money In, Money Out and Closing Balance for the period. Use the calendar menu to choose This Period, Last Period, Fiscal Year to Date or Custom Range…. Tap Reconcile to start a reconciliation (Mac and iPad).

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Adding a Bank Account

Tap + in the toolbar to open the Add Bank Account form. Complete the following sections:

Account Details

• Account Name (required): A descriptive name, e.g. "Business Chequing Account".
• Account Number (required): Your account number as shown by the bank.
• Account Type: Choose from Chequing, Savings, Credit Card, Line of Credit, Investment, Loan, or Other.

Financial Institution

• Institution (required): Pick from the built-in list of Canadian financial institutions, or choose "Enter manually" to type in the institution name yourself. When you pick from the list, the institution number is filled in automatically.
• Institution Number: The 3-digit Canadian institution identifier (e.g. 382 for Coast Capital). Filled automatically when you select from the list.
• Transit / Branch Number: The 5-digit transit number for your branch.

Notes (optional)

• Type any additional details in Notes.

Tap Save when finished.

Tip: After creating the bank account, link it to the corresponding GL account (e.g. Cash - Operating) by editing the GL account in the Chart of Accounts. Turn on Bank Account in the Settings card, then choose the bank account in Linked Bank Account. A bank account links to one GL account. The link is required for reconciliation.

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Editing a Bank Account

To open the editor, right-click or long-press a bank account row and choose View Details. All fields from the Add form are editable, plus a read-only General Ledger section that shows:

• Linked GL Account: The GL account currently linked to this bank account (e.g. "Cash - Operating (1010)"). To change the link, edit the GL account in Chart of Accounts.
• GL Balance: The current balance of the linked GL account.

The editor toolbar provides:

• Cancel: Discard changes and return to the list.
• Reconcile: Jump directly into reconciliation for this account.
• Active: Turn this off to archive the account, or on to bring an archived account back. The change is saved with the form.
• Archive / Delete: Archive the account if it has financial data, or delete it permanently if it does not.
• Save: Save your changes.

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Reconciling Your Bank Account

Starting a Reconciliation

There are several ways to start:

• From the Bank Accounts list: right-click a bank account and choose Reconcile.
• From the list: swipe right on a bank account row and tap Reconcile.
• From the bank account editor: tap the Reconcile button in the toolbar.

Addsworth Accounting opens the Bank Reconciliation screen and loads the unreconciled GL transactions for the linked account, dated up to the statement date. If a previously saved draft exists, your earlier progress is automatically restored.

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Understanding the Reconciliation Screen

The screen is organized into the following sections:

Statement

Reconciliation Summary

When the Difference is $0.00 and at least one item is cleared, Finalize is enabled.

Opening Balance Callout

If the list holds opening balance entries that are not cleared, Addsworth Accounting displays an informational callout explaining that these entries do not appear on bank statements. Tap Clear Opening Balances to mark them all as cleared in one step.

Transactions

A list of all unreconciled GL transactions for the linked account. Each row shows:

• A checkbox to toggle the cleared state
• Transaction description (from the journal name)
• Memo (from the journal description, shown in italics if different from the name)
• An "Opening Balance" badge where applicable
• Transaction date and reference number
• Amount: a deposit is a positive figure, a withdrawal a negative figure

The section header shows a running count: "Transactions (3 of 12 cleared)".

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Clearing Transactions

Working through your bank statement line by line, mark each GL transaction that appears on the statement:

1. Find the transaction in the list that corresponds to a line on your bank statement.
2. Tap the checkbox next to it. A checkmark appears and the item is included in the Cleared Total.
3. Watch the Reconciliation Summary update in real time. The Deposits & Credits, Cheques & Payments, Cleared Total, and Difference all recalculate as you clear items.
4. If you clear an item by mistake, tap the checkbox again to un-clear it.

Continue until the Difference reaches $0.00.

Tip: Work through your bank statement from top to bottom, clearing each item as you go. This systematic approach helps ensure nothing is missed.

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Recording Missing Items

If your bank statement shows a transaction that does not appear in your books (e.g. a bank fee, interest charge, or direct debit), you can record it without leaving the reconciliation screen:

1. Tap Record Missing Item (the plus-circle icon) in the toolbar. The Record Missing Transactions screen opens.
2. For each item, enter Date, Deposit or Withdrawal, Description, Amount and Offset Account. The offset account is the expense or income account for the other side of the entry, such as Bank Charges for a fee or Interest Income for interest earned. Tap Add Row for more items.
3. Tap Save All. Each row becomes a draft journal.
4. Post the drafts from Journals. A posted item then appears in the transaction list.

Important: Each journal is created as a draft. Only posted journals affect your financial reports and appear in the transaction list.

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Importing Transactions During Reconciliation

Import on your Mac.

If you need to import bank transactions before continuing, tap Import Statement (the document icon) in the toolbar. This opens the CSV import screen. See Importing Bank Transactions for full details on file format and the import process.

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Handling Uncleared Items

After clearing all items that appear on your bank statement, you may have transactions left uncleared. These are normal and represent timing differences:

Tip: Outstanding items are expected. Cheques issued near month-end often clear in the following period. Do not create adjusting entries to force the difference to zero; investigate the root cause instead.

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Saving a Draft

Addsworth Accounting saves your progress as you work: a moment after you change the statement balance, the date or a cleared item. A check mark in the toolbar shows each save.

To resume later, open the Bank Accounts list and choose Resume Reconciliation from the context menu. Your cleared items and statement balance are restored. To start over, tap Delete Draft in the toolbar.

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Finalizing the Reconciliation

1. Confirm the Difference shows $0.00 in green with a checkmark icon.
2. Review the cleared items to verify each one is correct.
3. Tap Finalize in the toolbar.
4. Addsworth Accounting:
   • Marks each cleared GL transaction as reconciled and records the reconciliation date.
   • Updates the bank account's Beginning Balance to the statement ending balance you entered (this becomes the starting balance for your next reconciliation).
   • Sets the bank account's Last Reconciled date to the statement date, so the Banking list shows the statement the account is reconciled to.
   • Creates a permanent reconciliation history record.
5. A confirmation alert displays the number of transactions reconciled.

The Finalize button is disabled until the difference is zero and at least one item is cleared.

Tip: After finalizing, reconciled GL transactions no longer appear in future reconciliation sessions. You start fresh with only unreconciled items.

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Cancelling a Reconciliation

Tap Cancel in the toolbar. If you have unsaved progress, a dialog offers Discard or Cancel. Discard leaves without your latest changes. Cancel stays. If there is nothing unsaved, you return to the previous screen immediately.

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Viewing Reconciliation History

To review past reconciliations, right-click / long-press a bank account and choose View History, or tap the History button (clock icon) in the reconciliation toolbar.

The history screen lists each finalized reconciliation showing:

• Statement date
• Statement ending balance
• Number of items cleared
• Date finalized

To export a reconciliation record as CSV, swipe left on the row and tap Export CSV, or right-click and choose Export as CSV….

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Tips for Accurate Reconciliation

• Reconcile in order. Work through each bank statement period sequentially so the beginning balance carries forward correctly.
• Post journals before reconciling. Only posted journal entries appear in the transaction list. Review and post any draft journals (including imported bank transactions) from the Journals screen first.
• Investigate every difference. A non-zero difference means something is unaccounted for. Use Record Missing Item for bank-side items or correct journal entries for book-side errors.
• Take your time. The app saves your progress as you work, so you can leave and resume later.
• Back up after finalizing. A reconciliation cycle is a natural checkpoint; back up your data once you have finalized.

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What's Next

• Getting Started with Addsworth Accounting: Return to the overview for the full accounting workflow.
• Importing Bank Transactions: Learn about CSV file formats and the import process.
• Setting Up Your Chart of Accounts: Add or adjust GL accounts and their bank account links.
• Creating Journal Entries: Record missing transactions discovered during reconciliation.
• GST/HST Tracking & Reporting: Understand how tax applies to banking transactions.
• Running Financial Reports: Generate a Balance Sheet to confirm your reconciled cash position.
• Backup & Data Management: Back up your data after completing a reconciliation cycle.