---
title: "Bank Reconciliation"
space: "ERPNext"
url: "https://www.prilk.com/docs/erpnext/bank-reconciliation"
updated: "2026-05-15"
---

## Bank Reconciliation

Bank Reconciliation is the closing step — confirming that ERPNext's view of a bank account matches the bank's view at a specific date.

### Why reconcile

Every month (or quarter), the balance shown in your books for a bank account should match the closing balance on your bank statement. If it doesn't, something is missing — a payment recorded but not on the bank, a bank fee not recorded, etc.

Reconciliation finds and fixes these gaps.

### Two related but different things

| Activity | What it does |
|---|---|
| **Processing the statement** | Bringing the day-to-day transactions in (see [Bank Statements](/docs/erpnext/bank-statements)) |
| **Reconciliation** | Confirming the closing balance matches at a date — typically end of month |

You process transactions throughout the month; you reconcile at the end.

### Run the reconciliation

**Bank Reconciliation Statement** (in Reports):

1. **Bank Account** — which one
2. **Account** — the corresponding bank account in your Chart of Accounts
3. **Report Date** — usually month-end

The report compares:
- **Book balance** — what ERPNext says the bank account holds
- **Outstanding** — payments recorded in ERPNext but not yet cleared at the bank
- **Bank statement balance** — what the bank says

The math:
```
Book balance
- Outstanding payments (not yet on bank statement)
+ Outstanding receipts (deposited but not yet on bank statement)
= Bank statement balance
```

If they match — done. If they don't, find the difference.

### Finding the difference

Common causes:
- A bank fee never recorded — make a Journal Entry
- A duplicate Payment Entry — Cancel one
- A transaction posted to wrong bank account — Cancel + Amend with the right account
- A timing difference — a Payment Entry on Dec 31 hits the bank on Jan 2 (legitimately outstanding)

### After the period closes

Once reconciled and you've moved past the period, lock the period via **Year-End Closing** or just don't post into closed months. This stops accidental edits to already-reconciled history.

### Bank Reconciliation Statement vs Bank Reconciliation Tool

| Tool | Purpose |
|---|---|
| **Bank Reconciliation Statement** | A report showing the math (used for the closing check) |
| **Bank Reconciliation Tool** | An interactive tool to process and match transactions (used during the month) |

You'll use both — the Tool to process transactions, the Statement to confirm reconciliation at month-end.