9 Bank Reconciliation

Bank reconciliation matches company’s bank ledger entries with the bank’s statement.
The result is a Reconciliation Statement showing: - Items cleared (matched in both Tally and Bank) - Outstanding items (not yet cleared) - Bank balance per books vs bank balance per bank statement - Reconciling items: cheques in transit, unpresented cheques, bank charges, direct credits

9.1 Prerequisites

  • Company selected and correct financial year opened
  • Bank ledger(s) created (e.g., HDFC Bank - Current)
  • Vouchers and bank transactions entered in Tally (payments, receipts, contra, charges)
  • Bank statement received (Excel/CSV/PDF) for the period
  • (Optional) If importing, prepare CSV: Date, Description, Debit, Credit, Reference

9.2 Entering Bank Data in Tally

9.2.1 Manual Entry

  • Record all bank transactions using vouchers:
    • Payments: Payment Voucher (select bank ledger)
    • Receipts: Receipt Voucher (bank ledger as Dr)
    • Contra: For cash-bank transfers
    • Bank Charges/Interest: Payment voucher (bank ledger credited, expense/interest debited)

Example Entries - 03-07-2025 — Cheque to Supplier XYZ — ₹15,000 (Payment voucher: Credit HDFC, Debit Creditors) - 10-07-2025 — Customer RTGS receipt — ₹20,000 (Receipt voucher: Debit HDFC, Credit Debtors) - 31-07-2025 — Bank charges ₹200 (Payment: Credit HDFC, Debit Bank Charges)

💡 Tip: Record cheque numbers and reference for easy matching.

9.3 Open the Bank Reconciliation Screen

  • Path: Gateway of Tally → Display → Statements → Bank Reconciliation
  • or Gateway → Accounting Vouchers → Bank Reconciliation
  • Choose the Bank Ledger (e.g., HDFC Bank - Current)
  • Set period with F2 (e.g., 01-07-2025 to 31-07-2025)
  • Screen displays: bank statement lines (if imported), book entries, ability to mark “Reconciled”

9.4 Matching / Marking Reconciled Entries

9.4.1 Manual Reconciliation

  • Match each bank statement line with the Tally voucher (amount, date, cheque/UTR/reference)
  • Select both, mark as reconciled (key/button varies; Space/R/Match/Enter)
  • Confirm reconciliation date (often bank statement date)
  • Repeat for all cleared items

Example - Bank shows RTGS ₹20,000, 10-07-2025, UTR123; Tally shows same receipt on same date. Mark both as reconciled.

9.4.2 Handling Special Cases

  • Amounts differ: record adjustment voucher for bank charge, reconcile difference
  • Cheque bounced: don’t reconcile; create reversal voucher
  • Unpresented cheques: leave as unreconciled—in future, clear when bank shows them

9.5 Review Reconciled & Unreconciled Lists

  • Filter to see:
    • Reconciled Entries: matched, with reconciliation date
    • Unreconciled (Book): vouchers entered, not yet cleared in bank
    • Unreconciled (Bank): bank statement entries not recorded in Tally

How to view:
Within the Reconciliation screen, use F12/View to switch between lists.

Example Output - Reconciled: Receipt ₹20,000 (10-07-2025), Payment ₹15,000 (03-07-2025) - Unreconciled: Cheque payment ₹5,000 (27-07-2025, not yet cleared) - Bank charges not in Tally: Bank charges ₹200 (31-07-2025)

9.6 Creating/Reversing Vouchers for Bank Adjustments

  • Bank charges/interest/direct credits: create vouchers in Tally (Payment for charges, Receipt for credits), then mark as reconciled
  • Dishonour/bank debit errors: create reversal/adjusment vouchers

Example - Bank debits ₹300 service charge (31-07-2025): Payment voucher — Debit Bank Charges ₹300, Credit HDFC ₹300

9.7 Generate Reconciled Statement / Reconciliation Report

9.7.1 Summary Statement

Shows: - Balance as per Bank Statement (closing) - Add: Deposits in transit - Less: Unpresented cheques - Adjusted bank balance (should match books) - Balance as per Tally books

Sample Bank Reconciliation Statement Format

Description Amount (₹)
Balance as per Bank Statement (closing) XXX
Add: Deposits in transit YYY
Less: Unpresented Cheques ZZZ
Adjusted Bank Balance XXX + YYY - ZZZ
Balance as per Books (Bank Ledger Closing) AAA

If adjusted bank balance = book balance → reconciliation complete.

9.7.2 Detailed Report

  • Lists each reconciled/unreconciled item with status, reference, date, amount

Print/Export - Alt+P: Print - Alt+E: Export (PDF/Excel/CSV/Word) - Use UTF-8 for CSV if needed

9.8 Illustration

M/s Lakshmi Traders maintains an account with State Bank of India.
The Cash Book shows a bank balance of ₹ 1,25,000 as on 31st March 2026.

The following differences were found while comparing with the Bank Statement:

  1. Cheque issued to Ramesh ₹ 15,000 on 28-03-2026 not yet presented for payment.
  2. Cheque received from Suresh ₹ 12,000 on 29-03-2026 deposited but not yet credited by bank.
  3. Bank charges ₹ 1,500 debited by bank not recorded in Cash Book.
  4. Interest credited by bank ₹ 3,200 not recorded in Cash Book.
  5. Direct deposit by customer ₹ 10,000 not recorded in Cash Book.
  6. Cheque issued ₹ 5,000 wrongly entered in Cash Book as ₹ 50,000.
  7. Bank wrongly debited ₹ 2,500 (bank error).

Prepare: - List of reconciled entries in Tally Prime - Bank Reconciliation Statement as on 31-03-2026

9.9 Solution

Step 1: Create Company

  • Open Tally Prime
  • Create Company
  • Name: Lakshmi Traders
  • Financial Year: 01-04-2025 to 31-03-2026

Step 2: Create Ledger

Gateway of Tally → Create → Ledger

1. Bank Ledger - Name: State Bank of India - Under: Bank Accounts

2. Party Ledgers - Ramesh → Sundry Creditors - Suresh → Sundry Debtors

3. Expense & Income Ledgers - Bank Charges → Indirect Expenses - Bank Interest → Indirect Income

Step 3: Pass Journal / Contra Entries

1. Cheque Issued to Ramesh Voucher: Payment Amount: ₹ 15,000

Dr Ramesh
Cr State Bank of India

2. Cheque Received from Suresh Voucher: Receipt Amount: ₹ 12,000

Dr State Bank of India
Cr Suresh

3. Bank Charges (Not recorded earlier) Voucher: Journal

Dr Bank Charges ₹ 1,500
Cr State Bank of India ₹ 1,500

4. Interest Credited by Bank Voucher: Journal

Dr State Bank of India ₹ 3,200
Cr Bank Interest ₹ 3,200

5. Direct Deposit by Customer Voucher: Journal

Dr State Bank of India ₹ 10,000
Cr Debtor Account ₹ 10,000

6. Rectification of Wrong Entry

Wrong entry difference = 50,000 – 5,000 = ₹ 45,000 excess credited

Voucher: Journal

Dr State Bank of India ₹ 45,000
Cr Ramesh ₹ 45,000

7. Bank Error (Temporary adjustment)

No entry passed in books (since bank error).

PART B: LIST OF RECONCILED ENTRIES IN TALLY PRIME

Gateway of Tally → Banking → Bank Reconciliation

Enter Bank Date for:

Transaction Amount Bank Date
Cheque issued ₹ 15,000 Not presented Leave blank
Cheque received ₹ 12,000 Not credited Leave blank
Bank Charges Reconciled Enter 31-03-2026
Interest Reconciled Enter 31-03-2026
Direct Deposit Reconciled Enter 31-03-2026
Rectification Entry Reconciled Enter 31-03-2026