Bank reconciliation in TallyPrime, step by step

A bank reconciliation compares two records of the same money: the bank ledger in the client's books and the bank's own statement. They rarely agree on any given day, because cheques take time to clear and banks post charges and interest the books don't know about yet. The point of reconciling is to explain every difference, so the ones that are actually errors stand out.

Why reconcile every month

• Missing entries show up: bank charges, interest, auto-debits and direct credits that nobody posted.
• Errors get caught early: a wrong amount, a duplicate voucher or a payment posted to the wrong bank.
• Uncleared cheques get chased before they go stale, and a cheque presented twice gets noticed.
• Year-end is easier: if every month is reconciled, the March closing balance needs no detective work. Our month-end checklist puts it in a routine.

Before you start

1. Bring the bank ledger up to date for the month, either by entering vouchers or by importing them from the statement (see how to import a bank statement into TallyPrime).
2. Check the bank ledger's opening balance against the bank's opening balance for the first period you reconcile.
3. Have the bank statement for the same period to hand, as a PDF, or as Excel, CSV or MT940 if you plan to use auto reconciliation.

Manual reconciliation: enter bank dates

This works with any statement, including a PDF, because you're reading the statement yourself.

1. Go to Gateway of Tally › Banking › Bank Reconciliation (or Alt+G and search for Bank Reconciliation) and select the bank ledger.
2. TallyPrime lists the vouchers for that bank that haven't been reconciled.
3. For each voucher that appears on the bank statement, enter the date it shows on the statement in the Bank Date column.
4. Leave the bank date blank for anything the statement doesn't show yet, such as a cheque the payee hasn't deposited.
5. Save. Reconciled vouchers drop out of the list, and the report shows the balance as per the books, the amounts not yet reflected in the bank, and the balance as per the bank.

Compare TallyPrime's balance as per the bank with the closing balance on the statement. If they match, the month is reconciled. If they don't, the difference is in the items you haven't dated yet, or in something the bank posted that the books don't have.

Auto reconciliation: import the statement

For banks that TallyPrime supports, it can match statement lines to vouchers for you.

1. Open the bank ledger and, in its bank configuration, set Enable Auto Reconciliation to Yes.
2. Download the statement from net banking as Excel, CSV or MT940. TallyPrime doesn't accept PDFs here, or Excel and CSV converted from PDFs.
3. In Bank Reconciliation, press Alt+O (Import) › Bank Statement, choose the file and import it from the preview.
4. Review the exact matches and accept them, then work through the potential matches one by one.
5. Statement lines with no matching voucher are left for you to post.

Tally's help covers the setup in detail: setting up bank reconciliation and auto bank reconciliation.

Reading the bank reconciliation statement

Start from the balance as per the books and walk to the balance as per the bank. Every step is one of these:

The two groups behave differently. Items the bank has but the books don't are your job to post now. Items the books have but the bank doesn't are timing differences that should disappear on their own. If one doesn't, that's the thing to investigate.

Clearing what's left

• Post the bank's own entries: charges, interest, auto-debits. Our guides on which voucher to use and which ledger each transaction goes to help here.
• Old uncleared cheques: a cheque is generally valid for three months from its date. Past that, check with the payee and, if it won't be presented, reverse the payment and reissue if needed.
• Unknown credits: park them in a suspense ledger with a note, ask the client, and clear suspense before the month closes.
• Differences that won't go away: check the opening balance first, then look for a voucher dated in the wrong month.

Common mistakes

• Reconciling against the wrong statement period, or a statement that starts mid-month.
• Importing the same statement twice into the books, which doubles every entry before reconciliation even starts.
• Entering the voucher date instead of the bank's date in the Bank Date column.
• Leaving suspense entries uncleared, so the account reconciles but the ledgers are wrong.

Where FileKey fits

FileKey prepares the entries before reconciliation. Upload the client's statement PDF and FileKey turns it into rows, checks the running balance on every row, suggests a ledger and voucher type for each, and gives you Tally XML to import. With the bank's entries already in the books, reconciliation comes down to dating the timing differences. See the bank statement to Tally converter.

Frequently asked questions

Written by the FileKey Team

FileKey builds the tools CA firms use for e-commerce GSTR-1 and bank statement conversion. We write these guides from the questions accountants and sellers ask us every filing month. Spotted something out of date? Write to [email protected] and we will fix it. More about FileKey.