Bank Reconciliation Calculator
Reconcile your bank statement balance with your book balance by accounting for outstanding checks, deposits in transit, bank charges, and unrecorded credits.
How to use this tool
- Enter bank statement balance, deposits in transit, outstanding checks, book (ledger) balance, bank charges (not in books), unrecorded credits (not in books) and bank errors (add if understated, subtract if negative) in the fields above.
- Results update instantly as you type — or click Calculate.
- Read your adjusted bank balance and the full breakdown beneath it.
⚠ This tool provides general estimates for education only and is not financial, tax or legal advice. Figures may not reflect your situation — verify with a qualified professional.
Formula
Adjusted Bank Balance = Bank Balance + Deposits in Transit − Outstanding Checks ± Bank Errors
Adjusted Book Balance = Book Balance − Bank Charges + Unrecorded Credits
A reconciliation is complete when Adjusted Bank Balance = Adjusted Book Balance.
How it works
Bank reconciliation is the process of matching a company's or individual's cash book balance with the bank statement balance as of the same date. Differences arise from timing (deposits in transit, outstanding checks) or from transactions recorded by one party but not yet the other (bank charges, interest credits).
The bank side is adjusted for items the bank has not yet processed (deposits in transit) or has processed that aren't in the books (outstanding checks). The book side is adjusted for items the bank has processed that aren't yet in the ledger. When both adjusted balances agree, the accounts are reconciled.
Worked example
Simple Bank Reconciliation
- Bank statement balance = $5,500. Add deposits in transit $300. Subtract outstanding checks $800.
- Adjusted bank balance = $5,500 + $300 − $800 = $5,000.
- Book balance = $5,000. No bank charges or unrecorded credits.
- Adjusted book balance = $5,000.
Both adjusted balances equal $5,000; the accounts are fully reconciled (difference = $0).
Common mistakes to avoid
- Adding outstanding checks to the bank balance instead of subtracting them — checks not yet cleared reduce the bank balance.
- Forgetting to adjust the book balance for bank service charges that appear on the statement but have not been recorded in the general ledger.
- Treating the statement end date as the reconciliation date when transactions cleared after that date belong to the next period.
Key terms
- Outstanding Checks
- Checks issued by the company and recorded in the books but not yet cleared (presented and paid) by the bank.
- Deposits in Transit
- Cash or checks deposited by the company and recorded in the books but not yet credited by the bank on the statement date.
- Bank Charges
- Fees deducted by the bank (service fees, NSF charges) that appear on the statement but have not yet been recorded in the company's books.
- Unrecorded Credits
- Amounts credited by the bank (interest earned, direct deposits) that have not yet been recorded in the company's ledger.
- Adjusted Balance
- The corrected balance on either the bank or book side after all reconciling items are applied; both should agree when reconciliation is complete.
Frequently asked questions
- What should I do if the adjusted bank balance and adjusted book balance do not match?
- There is an error somewhere. Common causes include a transposed number in the ledger, a missed bank fee, an unrecorded NSF check, or a timing difference on a deposit. Review each adjustment line by line.
- How often should a business reconcile its bank account?
- Monthly at a minimum, aligned with the bank statement cycle. High-volume businesses often reconcile weekly or daily to catch fraud or errors quickly.
- Are deposits in transit listed on the bank statement?
- No. A deposit in transit has been recorded in the books but has not yet appeared on the bank statement. You add it to the bank balance to arrive at the adjusted bank balance.