Bank reconciliation is the monthly process of verifying that your Edlio Accounting records match your physical bank statement exactly. It ensures your books and financial institution agree — confirming every deposited receipt, issued check, bank fee, and interest payment is accounted for, while identifying timing differences like outstanding checks and deposits in transit.
Think of reconciliation like balancing your school checkbook at month-end. You take your bank statement (paper or PDF), compare it line-by-line against transactions recorded in Accounting, check off cleared items, post any bank adjustments, and verify that the calculated difference is exactly zero.
How reconciliation works
During reconciliation, you align two independent records:
Your Accounting General Ledger: All receipts, deposits, disbursements, invoices, and transfers recorded during the fiscal period.
Your Official Bank Statement: The actual cash activity that posted through your financial institution.
The goal is to verify that your adjusted Book Balance equals your Statement Ending Balance. When all cleared items are checked off and all bank adjustments are recorded, the Difference becomes $0.00.
Step-by-step reconciliation walkthrough
To complete your monthly reconciliation:
Prerequisites: Ensure all receipts, deposits, payments, and transfers for the statement period have been posted before beginning.
Navigate to the Reconciliation module.
Account & Period: Select the Bank Account you are reconciling (e.g., Main Checking) and verify the Statement Period date.
Statement Ending Balance: Enter the exact statement ending balance from your official bank statement.
Check Off Cleared Transactions: Review the transaction table. Use the filter chips (All, Payments, Deposits, Adjustments, Transfers) to navigate. Check off each item that cleared the bank statement:
Checks that cleared the bank → check off.
Checks still outstanding (not yet cashed) → leave unchecked.
Deposits that cleared → check off.
Deposits in transit (end-of-month deposits not yet on statement) → leave unchecked.
Bank-to-bank transfers that cleared → check off.
Save for Later: If you need to step away or pause your review, click Save for Later. All checked items and progress are saved.
Attach Bank Statement: Upload a digital copy (PDF) of your official bank statement under Attachments for audit compliance.
Review Balance Summary: Review the Balance Summary panel on the right: Beginning Balance + Cleared Deposits − Cleared Payments ± Adjustments = Adjusted Book Balance. Confirm that Difference is $0.00.
Click Complete Reconciliation to lock and close the period.
Bank adjustments (interest, fees & returned checks)
Bank statements frequently contain transactions not yet entered into Accounting — such as interest earned or service fees. You record these via Bank Adjustment before finalizing.
⚠️ Save progress before recording adjustments:
Always click Save for Later before navigating to the Bank Adjustment screen. Navigating away without saving can clear previously selected checkmarks. Once the adjustment is posted, return to Reconciliation, check off the new adjustment, and verify your totals.
Supported Adjustment Types:
Bank Interest: Interest earned on account funds (increases book balance; allocate to General or designated interest fund).
Bank Fee / Service Charge: Monthly maintenance or analysis fees (decreases book balance).
Returned Check (NSF): A previously deposited check returned for non-sufficient funds (decreases book balance and reverses credit).
NSF Fee: Bank penalty charged for processing an NSF check (decreases book balance).
Wire Transfer Fee: Fees charged for incoming or outgoing wire transmissions (decreases book balance).
Other Adjustment: Custom balance corrections. You manually specify whether the adjustment increases or decreases the book balance.
To post a bank adjustment:
From Reconciliation, click Bank Adjustment (top header).
Select Bank Account, enter Amount, and set Date to match the statement posting date.
Select the Adjustment Type (Direction auto-populates accordingly).
Enter a Description and allocate the amount to the appropriate Fund.
Select Post Adjustment and print the confirmation record.
Monthly reports and history archive
Once reconciliation is completed, generate and archive the official documentation:
Print Monthly Financial Report: Directly from the completion confirmation screen, print the monthly reconciliation report. It details all asset account balances, itemized outstanding checks, deposits in transit, and includes a formal "Prepared By / Approved By" signature line for principal and auditor review.
Reconciliation History: Access Reconciliation > History to view past reconciled periods, review audit trails, inspect attached bank statements, or reprint past reconciliation packets at any time.
Timing Differences vs. Errors: It is normal for the Fund Balance report to show a different figure than the reconciled bank statement. Transactions entered on your ledger affect fund balances immediately, even if checks remain uncashed or deposits are in transit at the bank.
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