Bank Reconciliation

Why Bank Reconciliation Matters

Bank reconciliation matches the transactions in your books against your actual bank statement, line by line. It catches:

• Missed entries — payments made but not recorded
• Duplicates — same payment entered twice
• Bank charges, interest, NEFT failures you didn't know about
• Cheque-issue dates vs cheque-clearance dates
• Fraud — unauthorised debits

iAccounting's reconciliation engine reduces a 3-hour monthly chore to about 15 minutes.

Step 1 — Import the Bank Statement

Three ways to bring in your statement:

A. Upload PDF

Download the statement PDF from your bank. In iAccounting:

1. Go to Banking → Reconcile → [Bank account].
2. Click "Upload Statement" → pick PDF.
3. iAccounting's PDF parser extracts transactions (date, narration, debit, credit, balance).
4. Verify the opening and closing balances match the PDF.

Supports SBI, HDFC, ICICI, Axis, Kotak, Yes, IDFC First, and 30+ Indian banks out of the box.

B. Upload Excel/CSV

Some banks only give Excel. iAccounting accepts any CSV/Excel. On first upload, you'll map columns:

• Date column
• Narration / description column
• Debit column
• Credit column
• Balance column

The mapping is saved per bank — next time, it's automatic.

C. Live Bank Feed (Professional+)

Connect your bank account via secure read-only API. Transactions sync overnight. Setup:

1. Banking → Live Feeds → "+ Connect Bank".
2. Select bank, log in via OAuth (no password stored).
3. Authorise iAccounting read-only access.
4. Initial 90-day fetch happens immediately; daily sync from there.

Step 2 — Auto-Match

Click "Auto-Match Now". The engine matches each bank entry against your book entries on:

1. Date (±3 days for cheque clearing)
2. Amount (exact)
3. Reference number / cheque number (if present)
4. Narration keywords (party name, invoice number)

Typically 70-90% match on first pass. Status bucket:

Step 3 — Resolve "Bank Only" Entries

These are transactions on the statement that aren't yet in your books. iAccounting categorises them so you can add quickly:

Customer receipts

Click the row → system suggests the customer based on narration (e.g., "NEFT-RAJESH SHARMA"). Confirm; system creates a Receipt voucher mapped against open invoices.

Vendor payments

Same flow — narration → vendor suggestion → payment voucher.

Bank charges

Small debits with narration like "AMC chrg", "GST on chrg", "MAB chrg". Pre-classified to "Bank Charges" ledger. Just click "Accept All".

Bank interest

Credits like "INT", "INTEREST CR". Mapped to "Interest Income" ledger. Accept.

Loan EMI

Regular debit pattern detected. Split into Principal + Interest (you provide the amortisation schedule once).

Salary, GST, TDS payments

Identified by narration patterns. One-click categorise.

Step 4 — Resolve "Books Only" Entries

These are payments/receipts you recorded but haven't cleared the bank yet. Common reasons:

• Cheque issued, not yet presented — leave alone; will match when cleared.
• Cheque deposited, not yet cleared — same.
• Cheque returned — actionable. Mark voucher as bounced; system creates reversal entry.
• Wrong entry — entered the wrong amount or party. Edit.

Step 5 — Finalise Reconciliation

Once all rows are matched or explained:

1. System verifies: Books balance + uncleared cheques = Bank balance.
2. If yes → click "Finalise & Lock".
3. Generates a Bank Reconciliation Statement (BRS) as PDF — required for audit.
4. Locks the period; no edits without admin override.

The Bank Reconciliation Statement

The BRS is a standard auditor's document. iAccounting auto-generates it in this format:

Reconciling Multiple Bank Accounts

If you have 5 bank accounts, each is reconciled separately. The system tracks all under Banking → Accounts:

• Last reconciled date for each account
• Pending unmatched count
• Health indicator (green / amber / red)

Aim for green (fully reconciled within last 7 days) on every account.

Best Practices

1. Reconcile weekly, not monthly. Smaller batches are faster.
2. Match cheques on issue, not just clearance — track outstanding cheques.
3. Use Live Bank Feed if available — eliminates manual upload.
4. Build narration rules for repeating items (Uber, electricity, salary).
5. Lock reconciled periods — prevents accidental edits during audit.
6. Keep at least 6 years of BRS PDFs — for tax scrutiny defence.

Common Reconciliation Issues

"Opening balance mismatch"

Statement shows ₹50,000 opening; iAccounting shows ₹48,000. Usually previous period had unreconciled items. Fix the prior month first.

"PDF parser missed some rows"

Some bank PDFs have unusual layouts (font issues, missing borders). Edit the import in step view, manually add missed rows, or upload Excel instead.

"Auto-match suggesting wrong customer"

Common when two customers have similar names. Click the suggestion → manually pick the right one. The rules engine learns from your correction.

"Books balance off by ₹0.50"

Round-off issue. Add a journal entry to "Round-off (Indirect Income/Expense)" to absorb.

What's Next?

• Scan Bills with Mobile
• File GSTR-3B
• The Cash Book — Conceptual Foundation