What do I reconcile the bank account to?

The bank statement for the period, not the online balance you saw this morning. The online balance moves; the statement is fixed and is what a third party will ask for. Reconcile the ledger balance at the last day of the month to the statement ending balance at the same date, then explain the gap with outstanding checks, deposits in transit, and any bank items you have not recorded.

How long can a reconciling item stay outstanding?

A deposit in transit should clear in a day or two. An outstanding check older than ninety days needs a decision: reissue it, void it, or start treating it as unclaimed property, which most states require after a dwell period. A reconciling item that has rolled forward for six months is not a reconciling item, it is an error hiding in the reconciliation, and it is the first thing a reviewer should pull on.

Who should review the bank reconciliation?

Someone who did not prepare it and does not have access to move money. In a small company that is usually the fractional CFO or controller reviewing the accountant, or the founder reviewing a bookkeeper. Separating preparation from review is the single control that catches the misappropriation cases that actually happen at this size.

Do I need to reconcile every bank account every month?

Yes, including the ones with almost no activity. Dormant accounts are where fees accumulate unnoticed and where a company forgets it still has a balance. A zero-activity account takes two minutes and the reconciliation is the evidence that it was looked at.

Is a downloaded bank feed the same as a reconciliation?

No. A feed imports transactions and marks them matched. That confirms the ledger contains what the bank sent; it does not confirm the ledger contains nothing else, and it does not produce the ending-balance proof. Plenty of companies with a clean feed still have a cash account that is off, usually because of manual journal entries posted straight to cash.

What does an auditor actually ask for?

The reconciliation, the bank statement it was prepared from, evidence of who prepared and who reviewed it, and support for the significant reconciling items. If the statement is a screenshot taken later, or the reconciliation was rebuilt after the fact, the auditor will treat the whole balance as unverified and expand the testing, which costs you fees and time.

Guide

Bank reconciliation with the evidence attached: closing cash so it holds up later

A bank reconciliation proves that the cash balance in your ledger agrees with the bank, and that every difference between the two is explained by something real: a check written but not yet cashed, a deposit in transit, a fee the bank took that you have not booked. Doing it is half the work. The other half is keeping the proof: the statement you reconciled to, the date you did it, the person who prepared it, the person who reviewed it, and a note on every item that did not clear. A reconciliation without that trail is a number someone typed, and the first auditor or acquirer who asks will make you do it again from scratch.

By Vanward. Published 2026-09-15. Updated 2026-09-15.

Cash is the account everyone checks first, and it is the one most often reconciled in a way that cannot be reproduced. The balance agrees, the accountant remembers why, and then the accountant leaves, or the company raises a round, and nobody can show the work. What follows is how to do it so the work survives.

The reconciliation itself

Start from the two fixed numbers and move toward each other. The ledger balance at month end is fixed once the period is closed. The statement ending balance is fixed the moment the bank issues it. Everything in between is a list of timing differences and corrections, and each one needs a reason.

Line	What it is	What proves it
Statement ending balance	The bank’s number at the last day of the period	The statement PDF for that period, not a screenshot of today’s balance
Deposits in transit	Money you received and recorded that the bank had not yet credited	The deposit record, plus the next statement showing it cleared
Outstanding checks	Checks written and recorded that had not cleared	The check register with issue dates; anything over ninety days needs a decision
Bank items not recorded	Fees, interest, returned items, card settlements the bank applied	The statement line; these become journal entries in the same period
Errors	Amounts entered wrong on either side	The corrected entry, dated in the period the error belongs to
Adjusted ledger balance	Where the two sides meet	Agrees to the ledger after the entries above are posted, with no plug

If the two sides do not meet without a plug, the reconciliation is not done. A line called "difference" or "to balance" is the single most common finding in a first audit, and it is usually two or three real items that nobody chased.

Why the evidence has to travel with the number

A reconciliation is a claim. The statement is what makes it checkable. When they are stored apart, three things go wrong, and all three cost money later.

The statement changes out from under you

Banks restate. A returned item posts late, a merchant settlement is corrected, a fee is reversed. If the reconciliation points at a live bank portal rather than the statement you actually used, the support behind a closed month can change months after you signed it off, and you will not know until someone re-pulls it.

Nobody can tell which version was relied on

By the time an acquirer asks, there are three files named like the statement and two versions of the reconciliation. The question is not which one is right, it is which one the close was built on. A fingerprint, meaning a checksum taken when the file was captured, answers that in one line and ends the argument.

The review disappears

Everyone remembers that the reconciliation was reviewed. Nobody can show it. Review is the control that gives the number its weight, and if it is not recorded with a name and a time, it did not happen as far as a third party is concerned.

The discipline, in five lines

Reconcile to the statement for the period, and attach that statement. Explain every reconciling item, and clear the old ones rather than rolling them. Post bank items as entries in the period they belong to. Have someone who cannot move money review it. Record who did each part and when.

None of this is new. What is new is that it can be recorded as it happens rather than reconstructed afterward, which is the difference between a close you can defend and a close you have to redo.

What this looks like in Vanward

Bank reconciliation is a step on the close board with a preparer, a reviewer, a due day, and a ledger balance filled from the trial balance rather than typed. The statement is attached to the step, and when it is pulled from the accounting system it is stored as a verified snapshot: the file, a checksum taken at capture, and a pointer back to the source. If the books change after the snapshot, the run is flagged and a person decides whether to accept the new numbers or keep what was signed off. The close package export carries the trail out with the files, so the next person who asks gets the answer without asking you.

Questions founders ask

What do I reconcile the bank account to?: The bank statement for the period, not the online balance you saw this morning. The online balance moves; the statement is fixed and is what a third party will ask for. Reconcile the ledger balance at the last day of the month to the statement ending balance at the same date, then explain the gap with outstanding checks, deposits in transit, and any bank items you have not recorded.
How long can a reconciling item stay outstanding?: A deposit in transit should clear in a day or two. An outstanding check older than ninety days needs a decision: reissue it, void it, or start treating it as unclaimed property, which most states require after a dwell period. A reconciling item that has rolled forward for six months is not a reconciling item, it is an error hiding in the reconciliation, and it is the first thing a reviewer should pull on.
Who should review the bank reconciliation?: Someone who did not prepare it and does not have access to move money. In a small company that is usually the fractional CFO or controller reviewing the accountant, or the founder reviewing a bookkeeper. Separating preparation from review is the single control that catches the misappropriation cases that actually happen at this size.
Do I need to reconcile every bank account every month?: Yes, including the ones with almost no activity. Dormant accounts are where fees accumulate unnoticed and where a company forgets it still has a balance. A zero-activity account takes two minutes and the reconciliation is the evidence that it was looked at.
Is a downloaded bank feed the same as a reconciliation?: No. A feed imports transactions and marks them matched. That confirms the ledger contains what the bank sent; it does not confirm the ledger contains nothing else, and it does not produce the ending-balance proof. Plenty of companies with a clean feed still have a cash account that is off, usually because of manual journal entries posted straight to cash.
What does an auditor actually ask for?: The reconciliation, the bank statement it was prepared from, evidence of who prepared and who reviewed it, and support for the significant reconciling items. If the statement is a screenshot taken later, or the reconciliation was rebuilt after the fact, the auditor will treat the whole balance as unverified and expand the testing, which costs you fees and time.

How ready is your close?

Eight yes-or-no questions, two minutes, no account. You get a score out of 100 and the three gaps most likely to come up in an audit or a diligence request.

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