Bank Reconciliation Step-by-Step for South African SMMEs

Bank reconciliation is where bookkeeping quality is proven. If your books do not reconcile to the bank, your reports are unreliable.

Do this monthly without fail.

What Bank Reconciliation Means

It is the process of matching your recorded cashbook/bank ledger transactions to your actual bank statement transactions for the same period.

The objective: your adjusted ledger balance and adjusted bank statement balance should match exactly.

Step-by-Step Process

Export your bank statement for the month.
Export your bank ledger/cashbook for the same period.
Tick matched transactions one by one.
Identify unmatched items:
- Bank charges not posted
- EFT receipts not recorded
- Debit orders missing from books
- Duplicate entries
- Timing differences (payments issued late month clearing next month)
Post corrections with proper narration.
Re-run reconciliation until difference is zero.
Save reconciliation report and supporting statement PDF.

Common SA Issues to Watch

Debit order reversals and re-presents
Cash deposit fees reducing net amount received
Merchant fees (card machines/payment gateways)
Bank fee bundles not split correctly
Wrong VAT treatment on bank charges

Control Rules

Reconcile within 5 business days after month-end.
Reconciliations should be reviewed by owner/manager, not only preparer.
Any unreconciled difference older than 30 days must be escalated.

Red Flags

Persistent rounding differences month after month
Old unmatched entries carried forward repeatedly
High volume of manual journal entries to "force" balance
Unknown EFT withdrawals

If these appear, investigate immediately.

How Money Manager Helps

Use transaction logs in the Dashboard to verify expected inflows/outflows before reconciling your accounting ledger. This reduces month-end surprises.

Disclaimer: Reconciliation practices differ by system. Always keep a full audit trail of corrections and approvals.