Day 24: Bank Reconciliation (BRS)
✅ Today you will learn
- Why book balance and bank balance differ
- Update the books for items seen only in the bank statement
- Prepare a bank reconciliation statement (BRS)
- Reconcile in TallyPrime by entering bank dates
- Use bank statement import for auto-reconciliation
🏢 In the real world
On 30 June TallyPrime shows SBI balance ₹48,250 but the passbook says ₹54,300. The owner panics: “Is money missing?” Usually nothing is missing – cheques are in transit and the bank has entries you have not recorded yet. A bank reconciliation proves it, line by line.
Why the two balances differ
| Reason | In books? | In bank? | Effect on bank balance vs books |
|---|---|---|---|
| Cheque issued, not yet presented | Yes (deducted) | No | Bank higher |
| Cheque deposited, not yet cleared | Yes (added) | No | Bank lower |
| Bank charges / interest debited | No | Yes | Bank lower |
| Interest credited / direct deposit (NEFT, UPI) | No | Yes | Bank higher |
| Errors in books or by bank | — | — | Either way |
Two-step method
- 1Step 1 – update the books for items that appear only in the bank statement: bank charges ₹118 (Payment: Bank Charges Dr / SBI Cr) and direct NEFT ₹3,268 from Capital Office Supplies (Receipt: SBI Dr / party Cr).
- 2Step 2 – prepare the BRS for timing differences only: cheques issued but not presented, cheques deposited but not cleared.
Adjusted book balance = ₹48,250 – ₹118 + ₹3,268 = ₹51,400.
| Bank Reconciliation Statement of Rohit Stationers – SBI, as at 30 June 2026 | ₹ | ₹ |
|---|---|---|
| Balance as per company books (after updating charges and direct credit) | 51,400 | |
| Add: cheque no. 000231 issued to Sai Traders, not yet presented | 12,400 | |
| Less: cheque no. 482211 from Gupta School deposited, not yet cleared | 9,500 | |
| Balance as per bank (passbook) | 54,300 |
BRS in TallyPrime
- 1Gateway → Banking → Bank Reconciliation → select SBI Bank (or open the SBI ledger and press the Reconcile button).
- 2Set the period with Alt+F2 (1-6-2026 to 30-6-2026).
- 3For every voucher that appears in the bank statement, type the Bank Date (the date in the passbook).
- 4Leave the bank date blank for cheque 000231 and cheque 482211 – they are not in the statement yet.
- 5The bottom shows: Balance as per company books, Amounts not reflected in bank, Balance as per bank – it must equal the passbook ₹54,300.
- 6Ctrl+A to save.
Newer TallyPrime releases can import the bank statement (Excel/supported formats) and match entries automatically by amount, date and instrument number. Unmatched bank entries (charges, direct credits) can be created as vouchers from the same screen.
Solved examples
Example 1: Start from the passbook instead
Auditors often reconcile in the reverse direction. Passbook ₹54,300 – cheque 000231 not yet presented ₹12,400 + cheque 482211 not yet cleared ₹9,500 = ₹51,400 = adjusted book balance. Both directions must give the same answer.
Practice exercises (unsolved – answer hidden)
Try each exercise on paper or in TallyPrime first, then open the answer to check.
🏋️ Practice – do it yourself
Show solution
Update books: overdraft ₹25,000 + interest ₹820 = ₹25,820. Unpresented cheques reduce the bank overdraft (– ₹7,000); uncleared deposits increase it (+ ₹4,500). Overdraft as per passbook = ₹23,320.Show solution
Leaving it blank keeps it under “Amounts not reflected in bank”. Next month, enter the actual clearing date; it moves out of the unreconciled list and both balances agree.🏅 Job skills unlocked today
Quick quiz
🧠 Quick Quiz – test yourself
Interview corner
💼 Interview Corner
How do you do bank reconciliation in TallyPrime?
Banking → Bank Reconciliation → select the bank, set the period, enter bank dates for entries appearing in the statement, record vouchers for bank-only items (charges, interest, direct credits) and check that “Balance as per bank” equals the statement. Or import the statement for auto-matching.
What is a stale cheque?
A cheque presented after its validity of three months from the date on it; the bank will not honour it, so the entry must be reversed or a fresh cheque issued.
Summary
- Differences come from timing (cheques in transit) and bank-only entries.
- Step 1: record bank charges, interest and direct credits in books.
- Step 2: BRS for unpresented and uncleared cheques.
- TallyPrime: Banking → Bank Reconciliation; enter bank dates.
Day 25: bill-wise outstanding, credit periods, ageing and interest.
Frequently Asked Questions
Should UPI receipts be entered daily?
What if the bank has made an error?
Tally and TallyPrime are trademarks of Tally Solutions Pvt. Ltd. This is an independent course, not affiliated with or endorsed by Tally Solutions. All business names, GSTINs and figures in the examples are fictional samples.
