What is Bank Reconciliation?
Bank reconciliation is the process of comparing your business's financial records with your bank statements to ensure accuracy and identify any discrepancies. This critical accounting practice helps maintain accurate books and catch errors or fraud.
Why Reconciliation Matters
- • Ensures accuracy of financial records
- • Identifies unauthorized transactions
- • Catches banking errors or fees
- • Provides accurate cash flow picture
Step 1: Understanding Invoicely's Reconciliation System
Automatic Matching
Smart algorithms match transactions
Discrepancy Detection
Identifies unmatched items
Accurate Reports
Generates reconciliation reports
Step 2: Accessing Bank Reconciliation
- Navigate to Reconciliation: Click "Bank Reconciliation" in the sidebar menu
- Select Date Range: Choose the period for reconciliation (usually monthly)
- Choose Transaction Types: Select which transactions to include in reconciliation
- Run Reconciliation: Click "Generate Reconciliation Report" to start the process
Best Practice: Monthly Reconciliation
Perform bank reconciliation monthly to catch discrepancies early and maintain accurate financial records.
Step 3: Understanding the Matching Algorithm
How Invoicely Matches Transactions
Matching Criteria:
- • Amount matching (within 0.1% tolerance)
- • Date proximity (14-day window)
- • Transaction type (debit/credit)
- • Reference number matching
System Transactions:
- • Paid invoices (positive amounts)
- • Recorded expenses (negative amounts)
- • Purchase orders (negative amounts)
- • Income transactions (positive amounts)
Step 4: Adding Bank Transactions
Manual Bank Transaction Entry
- Click "Add Bank Transaction" button
- Enter transaction date and amount
- Provide description or reference
- Select transaction type (debit/credit)
- Save the bank transaction
Future Enhancement: CSV Import
Invoicely is developing CSV import functionality to automatically import bank statements for faster reconciliation.
Step 5: Reviewing Reconciliation Results
Understanding the Reconciliation Report
Matched Transactions
These transactions have been successfully matched between your system and bank records:
- • Shows system transaction and matching bank transaction
- • Displays match confidence score
- • Indicates amount and date differences (if any)
Unmatched System Transactions
System transactions without corresponding bank entries:
- • May indicate pending transactions
- • Could represent data entry errors
- • Might be timing differences
Unmatched Bank Transactions
Bank transactions without corresponding system entries:
- • Bank fees or charges
- • Unauthorized transactions
- • Missing transaction records
Step 6: Resolving Discrepancies
Common Discrepancy Types & Solutions
Timing Differences
Transactions recorded on different dates in system vs bank.
Solution: Verify dates and adjust if necessary. These often resolve in the next reconciliation period.
Bank Fees
Bank charges that appear on statements but not in your system.
Solution: Record bank fees as expenses in your system for future reconciliations.
Data Entry Errors
Incorrect amounts or missing transactions in your records.
Solution: Correct transaction amounts or add missing transactions to your system.
Duplicate Entries
Same transaction recorded multiple times.
Solution: Identify and remove duplicate transactions from your system.
Step 7: Export & Documentation
Reconciliation Documentation
Export Options:
- • PDF reconciliation report
- • CSV file with transaction details
- • Excel workbook with multiple sheets
- • Summary dashboard view
Report Includes:
- • Matched transactions summary
- • Unmatched items list
- • Reconciliation statistics
- • Date range and parameters
Record Keeping
Save reconciliation reports for audit purposes and to track reconciliation history over time.
Ready to Automate Your Bank Reconciliation?
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