Bank Account Reconciliation SOP

Standard procedure for pulling bank statements, matching transactions, identifying outstanding items, recording adjustments, and obtaining sign-off.

Steps

• Confirm the reconciliation period and account scope
  The accountant verifies the bank account(s), statement period, and reconciliation cutoff date before starting. Confirm the general ledger period to be reconciled and note any known timing differences from prior periods.
• Pull the bank statement and transaction activity
  The accountant downloads or retrieves the official bank statement for the selected period and exports the transaction activity report if available. Save the files in the designated close folder using the company naming convention.
• Extract the general ledger cash activity
  The accountant runs the cash account detail report for the same period from the general ledger. Include beginning balance, ending balance, deposits, withdrawals, fees, interest, and journal entries posted to the account.
• Match cleared transactions line by line
  The accountant compares each bank statement transaction to the corresponding general ledger entry and marks matched items as cleared. Verify date, amount, payee or payer, and transaction type for each match. Investigate any unmatched items before proceeding.
• Identify outstanding deposits, checks, and other timing differences
  The accountant identifies items that appear in one record but not the other, including outstanding checks, deposits in transit, bank fees, interest, returned items, and unposted journal entries.
• Record approved reconciling adjustments
  The accountant prepares and posts approved journal entries for bank fees, interest income, returned items, and other authorized reconciling items. Use the correct account coding and attach supporting documentation to each entry.
• Escalate unresolved discrepancies
  The accountant escalates any unexplained variance, suspected duplicate posting, unauthorized transaction, or missing support to the finance manager or controller. Do not finalize the reconciliation until the discrepancy is resolved or formally approved as a non-conformance.
• Calculate the adjusted ending balance and confirm tolerance
  The accountant calculates the adjusted bank balance and adjusted general ledger balance, then confirms that the difference is zero or within the approved tolerance defined by company policy. Document any remaining variance and the reason for it.
• Obtain reviewer sign-off and archive the reconciliation
  The preparer submits the completed reconciliation, supporting reports, and journal entry references to the reviewer for sign-off. The reviewer confirms completeness, accuracy, and timely completion, then the accountant archives the final package in the controlled records location.