5 Bank Reconciliation Mistakes That Wreck Your Month-End

A bank reconciliation exists to answer one question: does your accounting system agree with what actually happened in your bank account? When it doesn't, the cause is almost always one of a handful of repeat offenders.

1. Duplicate transactions. Bank feeds and manual entry both feeding the same transaction into your books is the single most common cause of an unreconciled account. It usually shows up as a mysteriously inflated expense or income figure.

2. Unallocated or misapplied receipts. A customer payment sitting in a suspense account instead of being matched to the right invoice will throw off both your bank reconciliation and your accounts receivable aging.

3. Incorrect opening balances. If the opening balance in your accounting software doesn't match the actual opening balance on your bank statement, every reconciliation afterward will be off by the same fixed amount — often for months before anyone notices.

4. Timing differences left unexplained. Outstanding checks and payments still in transit are normal and expected. The mistake isn't the timing difference itself — it's failing to document and track it, so it silently ages instead of clearing.

5. Bank fees and charges posted late or not at all. Small, recurring charges are easy to overlook, but they compound. A reconciliation that's 'close enough' every month for a year is rarely actually correct.

The fix for all five is the same discipline: reconcile weekly rather than only at month-end, investigate every discrepancy immediately rather than letting it roll forward, and never post a plug or 'balancing' journal entry just to make the numbers match.