As part of our closing process, we’ve already reviewed all the sub-ledgers that you use to record the details of all your cash transactions—cash receipts journal, cash disbursements journal, and payroll journal. If you missed any transaction, these should now all be posted in adjusting entries to the Cash in Checking account.

If you’ve done everything right and found all the errors, the balance in your bank checking account should match the balance in the Cash in Checking account. Your statement from the bank might not be in yet and you can’t officially close the books until you get that, but you can make sure that at least your internal ledgers all prove out.

You may find you have a difference and need to do some detective work to find the problem. Finding discrepancies can be like looking for a needle in a haystack, but luckily there are a few good places to start depending on the differences you find.

By proving out your sub-ledgers before the bank statement arrives, your task of verifying that statement should be relatively simple. Reconciling a business bank account is similar to verifying the balance in your personal checking account. You do that, don’t you? Well, at least every few months, right?

In a business account it is critical to reconcile the checking account every month to be sure your month-end statements are correct. The format for reconciling your bank statement is relatively simple. Here’s what it should look like.

If the ending balance and the balance per checkbook match, your work is done. If not, use the steps previously mentioned when verifying your Cash in Checking account to find out why there is a difference.

Deposits usually show up on your check statement very quickly. Unless you happen to make a deposit on the day the statement was closed by the bank, all your deposits should be there. If you do find a deposit missing, be sure you keep that proof of deposit and verify with the bank that it is in your account.

Today, many people use online banking and can quickly verify deposits that did not show on the statement. If you don’t use online banking, you may have automated phone access to check your most recent deposits. Otherwise, if neither online banking or an automated phone system is available, you may want to make a quick call to your bank to be sure there isn’t a problem. You certainly don’t want any checks to bounce.

When everything is proved out, keep the worksheet and the bank statement together. You’ll have an easy reference for the next month to review checks and deposits that were missing and make sure they have all cleared with the next statement.

If checks are outstanding on two statements in a row, it’s time to find out why they have not been cashed. A check could have gotten lost in the mail and never been received by the vendor who is still waiting for payment. Calling that vendor and finding out if there is a problem could save you interest expenses or late fees.