Matching the bank to your books
Your books say one figure and the passbook says another. That is normal. Reconciliation is finding out exactly why.
Your books say one figure and the passbook says another. That is normal. Reconciliation is finding out exactly why.
Both can be perfectly correct and still disagree, because they are written at different moments. The four usual causes:
Beyond those four, a difference is an error: an amount keyed wrong, an entry missing, or one recorded twice.
Do it monthly. A month takes twenty minutes. A year takes a day and a half, and you will not remember what half the lines were.
The most expensive habit here: seeing a healthy bank balance and spending against it while five of your own cheques are still out. They will present. Read the bank figure net of what you have already issued.
Entering a statement one payment dialog at a time is why most shops fall behind: ninety rows, ninety party pickers, ninety saves. Aned Book's Silver edition has a single-entry statement grid — you key the statement the way it is printed, one line per row, and each row becomes an ordinary receipt or payment with both sides written for it. Rows where both sides are your own money are marked as contra, so a cash deposit does not appear as income.
Monthly. A month is twenty minutes of ticking; a year is a day and a half, and by then nobody remembers what the entries were.
One where both sides are your own money — cash deposited into the bank, or withdrawn from it. Nothing was earned or spent, so it is kept out of receipts and payments.
After the four normal causes, a residue is an error. Narrow it by date — reconcile to the end of each week until one week breaks — then read those entries.
Aned Book Silver posts both sides from the document you already raised, so the ledgers, trial balance, profit & loss and balance sheet are a consequence of your billing rather than a second job. Basic is billing and inventory, without the ledgers.