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Deep Dive into Bank Reconciliation

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Bank Reconciliation is a statement where we can see the mismatch between the cash book and the bank book (Passbook).

Reconciliation of bank balance as per the cash book with the bank balance as per the passbook. BRS is prepared to have the authenticity of the transactions entered to verify the balances from the actual with the general.

Bank Reconciliation helps in cross-verification between bank passbook/statement and Tally book, and this is the most important task to perform in a business as revenue is involved. There are chances of misappropriation in the balance if reconciliation is not done. Any error or missing transaction(s) in the company book or bank can be identified immediately.


  • A cheque was issued but not presented for payment.
  • The cheque was collected but not deposited.
  • Bank charges and interest debited in the passbook.
  • Cheque dishonour.
  • Collections made by the banker on behalf of the customer.
  • Payment is made by the banker on behalf of the supplier/vendor.
  • A cheque is drawn but not recorded in the cashbook.

Auto Bank Reconciliation in TallyPrime is an important process that helps a business to cross-verify its Company’s books of accounts with the bank statement. Comparing the two statements with a long list of transactions is stressful and error-prone using manual and conventional methods. However, TallyPrime will minimize the time spent and the risk of making errors during Auto-bank reconciliation.

TallyPrime has enhanced the Bank Reconciliation capability to view and import the bank statement and to auto-reconcilise the transactions.

Tally provides its users with the facility of selecting the formats which include configurations and input file type. Tally supports Excel, CSV, and MT940 formats of the bank statement.

TallyPrime identifies the transactions in a statement based on Amount & Cheque Number. If both match against any transactions in Tally, then the bank date will be filled automatically in Bank Date filed in the Bank Reconciliation screen.

Bank reconciliation offers several crucial benefits for both individuals and businesses, ensuring financial accuracy, integrity, and informed decision-making.

Here are the key advantages of bank reconciliation:

  1. Financial Accuracy: Bank reconciliation helps ensure that the financial records of an individual or a business match the bank’s records accurately.
  2. Fraud Detection: Regular reconciliation acts as a powerful tool to detect unauthorized or fraudulent activities such as unauthorized withdrawals or forged checks.
  3. Error Identification and Correction: Human errors, software glitches, or bank processing mistakes can lead to discrepancies in financial records.
  4. Budgeting and Cash Flow Management: Accurate financial records, facilitated by bank reconciliation, provide clear insights into the available funds.
  5. Timely Decision-Making: Timely reconciliation provides real-time information about the financial status of an individual or a business. This up-to-date data is essential for making informed decisions, whether it’s about investments, expenditures, or other financial strategies.
  6. Legal Compliance: In many jurisdictions, businesses are legally required to maintain accurate financial records. Bank reconciliation not only ensures compliance with these legal requirements but also provides a clear audit trail, demonstrating financial integrity if required by regulatory authorities.

In essence, bank reconciliation is not just a financial task; it’s a strategic imperative. It safeguards financial stability, promotes transparency, and empowers individuals and businesses to make sound financial decisions in an ever-changing economic landscape.

So, the next time you balance your checkbook or review your company’s financial records, remember the intricate collaboration of numbers and transactions that bank reconciliation entails. Embrace it not as a chore, but as a vital skill, empowering you to navigate the world of finance with confidence and accuracy.


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