Reconciliation is the process of confirming that the balance in your ledger matches the balance reported by an external source — a bank statement, a credit card statement, or a brokerage account. It catches errors, missed transactions, and fraud.
Why reconcile
- A ledger is only useful if it reflects reality. Reconciliation is the check.
- Missed transactions (automatic subscriptions, bank fees, interest) accumulate silently. Reconciliation finds them.
- Duplicate entries, wrong amounts, and mis-categorized transactions are caught when the ledger balance does not match the statement balance.
Process
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Get the statement. Download or retrieve the official balance and transaction list from the institution for the period.
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Compare balances. Check the ledger balance for the account against the statement’s ending balance as of the statement date.
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Identify discrepancies. Walk through transactions in the statement and mark each one as present in the ledger. Flag any that are missing or differ in amount.
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Record missing transactions. Add any transactions from the statement that are not in the ledger (bank fees, interest, automatic payments).
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Correct errors. Fix wrong amounts, dates, or account assignments.
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Assert the balance. In Beancount, add a
balancedirective on the statement date to lock in the reconciled balance:2025-01-31 balance Assets:Bank:Checking 1,234.56 USDThe Beancount checker will flag an error if the computed balance does not match, which means reconciliation is enforced on every validation run.
Frequency
- Bank and credit card accounts: monthly, when statements arrive.
- Cash accounts: whenever the balance is countable.
- Investment accounts: quarterly or when statements are issued.
Common sources of discrepancy
- Pending transactions that have not cleared.
- Bank fees or interest not yet recorded.
- Transactions entered with the wrong amount or date.
- Transactions recorded to the wrong account.