How to Reconcile Your Books at Year-End (Bank & Credit Card)

Kishan Prajapat

May 23

2 min read

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✅ What is Reconciliation?

Reconciliation is the process of matching your internal financial records (bookkeeping software or ledger) with external records like bank statements, credit card statements, and loan summaries to ensure they accurately reflect the same transactions.

🛠️ Step-by-Step: How to Reconcile Your Books

1. Gather All Statements

Download bank and credit card statements for the entire financial year.
Include business checking accounts, savings, PayPal, Stripe, or any other payment gateway.

2. Open Your Bookkeeping Software

Use tools like QuickBooks, Wave, Xero, or your spreadsheet ledger.
Navigate to the Reconciliation or Bank Feeds section.

3. Match Transactions One by One

Compare each transaction in your books to the bank statement.
✅ Confirm date, amount, and vendor match exactly.
❌ Flag duplicates, missed entries, or mismatched values.

4. Identify & Fix Discrepancies

Common errors:
- Missed deposits or expenses
- Duplicated entries
- Incorrect categorization (e.g., personal vs business)
- Bank fees or interest not recorded
Adjust your books where necessary — never adjust the bank statement.

5. Reconcile Credit Cards Separately

Follow the same process using your credit card statements.
Don’t forget to account for interest, fees, and any refunds or chargebacks.

6. Verify the Ending Balance

The ending balance in your books should match the statement’s closing balance.
If not, recheck for missing or erroneous entries.

7. Mark the Period as Reconciled

Most software will let you “lock” the period or mark it as reconciled.
This prevents accidental changes post-reconciliation.

📌 Tips for a Smooth Year-End Reconciliation:

Reconcile monthly to avoid chaos at year-end.
Keep digital backups of receipts and statements.
Involve a professional bookkeeper or CPA for complex issues.
Always review merchant accounts (like Stripe, Square, PayPal) — they often have timing gaps with bank deposits.