Checkbook Reconciliation: How to Balance a Checkbook
It is very important that you balance your checkbook each month to protect yourself from theft, mistakes, and to keep the number of overdraft bank charges to zero. Thieves will debit a small amount each month from a checking account hoping that the owner will never notice, and many of them don't. Millions of people are victims of this each year, so don't think it can't happen to you. Banks make mistakes, sometimes debiting amounts from the wrong account. It is your duty to check your statement each month and to report any errors to the bank within 30 days.
Balancing your checkbook is easy and shouldn't take long if you know what to do. Your bank statement likely has a form on the back of it that walks you through the steps of balancing your checkbook. If you don't have such a form, use the one below.
If your checkbook doesn't balance, it is likely for one of the following reasons:
1. You made a mistake in adding or subtracting in your checkbook.
2. You forgot to list a check that is still outstanding. Perhaps it is still outstanding from last month's statement.
3. Transposition errors. Perhaps you entered 64.00 in your checkbook when you should have entered 46.00. A good way to test this is to divide the difference by 9. If it is divisible by 9, there is a good chance you made a transposition error.
4. You forgot to record a check or a deposit
Checkbook
Checkbook balance . . . . . . . . . . . . . . . . . . . . . . . .
Add Earned interest income . . . . . . . . . . . . . . . . .
Subtract Service Charges / Fees . . . . . . . . . . . . . .
New Checkbook Balance . . . . . . . . . . . . . . . . . . . .
Bank Statement
Statement balance . . . . . . . . . . . . . . . . . . . . . . . .
List outstanding checks . . . . . . . . . . . . . . . . . . . . .
$_
$____________________
$____________________
$____________________
$____________________
$____________________
Check No. Amount
__________ __________
__________ __________
__________ __________
__________ __________
Check No. Amount
__________ __________
__________ __________
__________ __________
__________ __________
Subtotal [subtract (f) from (e)] . . . . . . . . . . . . . . .
Total of unrecorded deposits (list below) . . . . . . . .
$____________________
$____________________
Date Amount
__________ __________
__________ __________
Date Amount
__________ __________
__________ __________
Checkbook should show this balance . . . . . . . . . .
[Add (g) and (h)]
$____________________
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
Custom Search
Budgeting > How to Balance a Checkbook
