Simple Bank Reconciliation

A Beginner’s Guide to Bank Reconciliation

The term “bank reconciliation” refers to matching the bank account feed in your Lendio account, with your actual bank account over a certain period of time. This is an important process to perform to ensure the accuracy of the transactions within your software account so that any accounting actions performed are sourced from correct data. If the two numbers don’t match, then some error was made.


For example, let’s say your bank statement shows a balance of $10,000 at the end of October. Meanwhile, your Lendio account feed shows a balance of just $8,000. Considering your bank statement is the ultimate arbiter of truth, your bank feed should be reconciled to correct any missing transactions.

Why might my Lendio bank feed not match my bank statement?


There can be a variety of reasons for discrepancies between your Lendio account feed and your bank statement. Reasons include:


  • Manually entered transactions caused duplications

  • Reversed/Refunded transactions weren’t correctly processed

  • Outstanding transactions from older periods changed older balances

  • Missing transactions from the bank feed didn’t import


No matter how diligent you are, discrepancies can creep in. Lendio's software has made it easy to reconcile your feed so you can rest assured that your accounting is always working from correct data. Let’s look at how to use our Period Reconciliation Tool (PRT) for this purpose.

Period Reconciliation

Here’s how to reconcile your bank feed in your lendio account with your bank statement;


Step 1: Have your bank statement handy

Since you’ll be squaring up the bank feed numbers in your Lendio account with your actual bank account, you’ll need to have your bank statement ready to view. So log into your bank and download the statement from the month you are trying to balance. 


Step 2: Go to “Reconcile Accounts” in your Lendio bank feed


After logging into your dashboard, click “Bank Accounts” on the left navigation.



To the right of your bank account feed, you’ll see a folder icon on the right-hand slider.


Clicking this will open the slide as well as Lendio's tool to reconcile accounts as seen below.



Step 3: Fill in the Reconciliation Period prompts


The first time you reconcile using this tool, you will be prompted to define your start and end date as well as your beginning and ending balances from your bank statement (for your chosen period).




Once your information is filled in, click “Reconcile Period.” You’ll immediately see whether your Lendio bank feed matches with the balances you just entered in from your bank statement.


If the balances match, this period is now reconciled. You now are assured that your bank feed and your bank statement are mirrored for this time period.


Reconciled periods will be grouped together in folders named after the end date. These folders can be found at the bottom of the bank feed.



Key Benefit of the Folder Method:


The benefit of having these folders is to show you precisely which periods you have already reconciled. Now you have quick access to a date range that you know matches up to your bank statement. These folders will always be at the bottom of your list of bank transactions.

You can expand each folder to see the transactions there using the arrow on the right hand side on each folder line, as well as click “Undo Period” to un-reconcile this date range. You may want to undo the reconciliation if your bank statement changes, which is a rare occurrence.




One important note: if you undo a reconciled period, every subsequent period will also be undone. This is to ensure no erroneous transactions can be carried over to the next time periods.

What if my feed doesn’t reconcile?

If, after using the Period Reconciliation tool, you find that your Lendio bank feed balance doesn’t match your bank statement, we have provided an easy way to fix that as well, using our Bank Feed Corrections tool.


This feature lets you import a CSV file from your bank and upload it directly into your accounts' bank feed. This will automatically find any discrepancies and tell you which transactions are either missing or duplicated, as well as giving you the option to easily correct these errors.


Here’s how the tool works.


Step 1: Open the Bank Feed Corrections tool


If you use the Reconcile Period tool and there are discrepancies, you will be given the option to use the Bank Feed Corrections tool. You can also use this at any time by selecting it from the “More” menu in the upper right.



Step 2: Upload a CSV version of your bank statement


The next screen will prompt you to upload a CSV of your bank statement, which you can download from your bank’s website.



Once uploaded, the tool will prompt you to map the column headers and log the date range of the bank statement you just uploaded.

Step 3: Review and apply proposed changes


Next, the Bank Feed Corrections tool will display a summary of the proposed changes for you to approve.




Click on “View Corrections” and the tool will offer to fix these discrepancies by importing any missing transactions. You’ll see checkboxes so you can manually skip any corrections you don’t want imported into your account.


Usually, you’ll leave all proposed changes checked and then click “Import Entries” to apply these changes to your Lendio account.

On the next step, the tool will prompt you to remove any duplicate transactions. Again, you will have checkboxes to manually skip any entries you don’t want to change in your bank account feed.




Click “Delete Entries” to apply changes.



You’re all set! The next screen will provide a summary of the updates that have been made to your Lendio account via the Bank Feed Corrections tool.



Congratulations!

To learn even more about reconciliation, check out our blog post on the topic here.

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