Use this Bank Reconciliation Calculator to adjust bank and book balances for deposits, checks, fees, credits, and errors, then find the difference quickly.
Bank Reconciliation Formula
Bank reconciliation adjusts both the bank statement and the book or check-register balance for timing items and unrecorded transactions. The two adjusted figures should agree when every item is accounted for.
Adjusted Bank = Statement Balance + Deposits in Transit - Outstanding Checks + Bank Corrections Adjusted Book = Book Balance + Bank Credits - Bank Fees + Book Corrections
The remaining difference is:
Difference = Adjusted Bank - Adjusted Book
Variables:
- Deposits in transit are recorded in the books but not yet on the bank statement
- Outstanding checks are recorded in the books but have not cleared the bank
- Bank credits include interest or other additions not yet in the books
- Bank fees and debits include service charges, automatic payments, or returned-item fees not yet in the books
- Corrections are entered as positive to increase a side or negative to decrease it
A zero difference means the entered adjustments reconcile mathematically. It does not prove that every transaction is valid, so each adjustment should still be matched to a statement line, receipt, check, transfer, or error correction.
Common Reconciliation Adjustments
Use the side shown in the table to avoid adding the same timing item to both balances.
| Item | Adjustment side | Typical treatment |
|---|---|---|
| Deposit in transit | Bank side | Add to statement balance |
| Outstanding check/payment | Bank side | Subtract from statement balance |
| Interest credited by bank | Book side | Add to book balance |
| Monthly service fee | Book side | Subtract from book balance |
| Bank error | Bank side | Enter signed correction |
| Book-entry error | Book side | Enter signed correction |
Example Problems
Example 1: Reconcile both sides.
The bank statement ends at $5,420. Add an $800 deposit in transit and subtract $625 of outstanding checks to get an adjusted bank balance of $5,595. The book balance is $5,510; add $12 of interest and subtract a $27 fee to get $5,495. The remaining difference is $100, so another item is missing.
Example 2: Find the needed book adjustment.
If the adjusted bank balance is $5,595 and the known adjusted book balance is $5,495, the additional book adjustment required is +$100. That amount should not be posted until the transaction or error causing it is identified.
Frequently Asked Questions
Why do deposits in transit increase the bank side?
They are already included in the books but not yet included on the statement. Adding them to the statement balance puts both sides on the same timing basis.
Why are outstanding checks subtracted from the bank side?
The books have already reduced cash for those payments, while the bank has not. Subtracting them from the statement balance recognizes the future clearing amount.
What should I do when the difference is not zero?
Check for transposed digits, omitted fees, duplicate entries, uncleared payments, deposits recorded for the wrong amount, and statement transactions not yet entered in the books. Reconcile the source before forcing an adjustment.
