Performing Bank Reconciliation

Bank reconciliation is the process of matching transactions you've got recorded in Tally to what you've got in the bank. Bank reconciliation is important as it double checks that your accounts are correct and up to date.

Beginning a Reconciliation

A bank reconciliation can be done by going to Bank > click the Reconcile button, you'll require your online or paper statement in order to cross check the information there with what is currently on Tally. On the next page you'll see the following details listed:

  • Bank Account – this is the bank account that you are going to reconcile. You can change this by using the drop down.
  • Start date – this is the start date of your reconciliation and is based on the either:
    • Your last reconciliation – if you've reconciled before then the start date will be the day after your last reconciliation.
    • Bank account start date – if you've not reconciled before then the bank account start date will be the first day of the reconciliation. You can see the bank account start date by going to Bank > Edit Details link next to the account > Start date.
    • Reconciliation date – if you've just moved over to Tally and have been using previous accountancy software then you've most likely reconciled before; you can set the date to which you have previously reconciled up to by going to Bank > Edit Details link next to the account > Set the reconciliation date to the date that you previously reconciled up to, the start date will be the day after this.
  • Start balance – this is the balance that's recorded in Tally as the opening balance on the start date. You can see the balance that is recorded here by going to Bank > View/Add Transactions > Looking for the last transaction on the date before your start date, this is the opening balance of the start date.

You will also be asked to enter in the following details:

  • Statement date – this is the date that your statement is dated.  The statement date is the last date of any transactions on your statement
  • Statement balance – this is the closing balance at the end of your statement date

When you've entered in all these details just click the Begin button. You will then be taken to the reconciliation screen.

Performing the reconciliation

After you have begun your reconciliation you will be taken to the reconciliation screen, this screen is separated into different sections: money out, money in and reconciliation details. Using the money out and money in sections and comparing with your paper or online statement, tick off all the transactions that appear on both and match exactly. The amount and date should match perfectly. After you have ticked off all transactions that appear scroll down to view the reconciliation details, the most important part here the highlighted box on the far right hand side, this contains two calculations:

  • Total of ticked items – this is the total of all the items that you have ticked in the money in and money out sections above.
  • Left to clear – This is the statement balance minus the total of ticked items – at the end of your reconciliation this should be zero.
    • If there is a positive balance left then you are missing a transaction in Tally. This could either be a transaction that hasn't been entered, or a transaction that has been entered in Tally for an amount less than it appears on your paper statement. This can also be caused by a transaction being dated incorrectly.
    • If there is a negative balance left then Tally has a transaction recorded that doesn't appear on your bank statement, or the amount in Tally is higher than it is in the bank. This can also be caused by a transaction being dated incorrectly.
    • If the amount is zero then the reconciliation balances perfectly and all details recorded in Tally match exactly what you've got in your account.

If your reconciliation balances perfectly and you've got 0.00 left to clear then you can save this reconciliation. Just click the Reconcile Now button. If you would like to leave this reconciliation and save the items that you've got ticked at the moment and return to it later just click the Leave Reconciliation button. You can resume this reconciliation later by going to Bank > Reconcile button next to the account that you've part reconciled > Click the Resume this reconciliation link. If you would like to leave this reconciliation and not save any of the ticked items that you have previously ticked then just click the Abandon Reconciliation button.

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