Bank Reconciliation Statement (BRS) isn't optional—it's essential for tracking cheques, matching your books with bank statements, and avoiding nasty surprises during audits. This guide covers multiple Excel-based formats, downloadable templates, and step-by-step reconciliation methods used by professionals. Download ready-to-use formats for India and international businesses.
🏦 What is Bank Reconciliation Statement?
A Bank Reconciliation Statement (BRS) is your financial safety net. It helps you match what your accounting books say with what the bank actually shows. Think of it as a reality check for your business finances.
Even when your bookkeeping is spot-on, there's often a mismatch. Why? Because cheques take time to clear, banks deduct charges automatically, and sometimes transactions get recorded on different dates. BRS bridges this gap, making sure every rupee is accounted for and explainable.
Whether you're looking for a bank reconciliation statement format for India or a bank reconciliation template for international use, this guide covers everything you need.
💡 Why BRS Matters for Your Business
Here's what proper bank reconciliation does for you:
- Tracks pending cheques: Know exactly which cheques you've issued but haven't cleared yet
- Confirms actual receipts: Verify that customer payments have truly reached your bank account
- Catches errors early: Spot duplicate entries or missing transactions before they become problems
- Prevents audit headaches: Have clean records ready when auditors or tax officials come knocking
- Builds credibility: Banks look at your BRS when you apply for loans—messy records mean loan rejections
- Cash flow clarity: Know your actual available cash, not just what's on paper
📘 Bank Reconciliation Statement Format
Let me show you the standard format of bank reconciliation statement with a real example. Imagine your accounting software shows ₹1,20,000 in your bank account, but when you check your actual bank statement, it shows only ₹1,14,000.
That's a ₹6,000 difference! Here's how you reconcile it:
Standard Bank Reconciliation Statement Format
Most commonly used format for monthly reconciliation
| Particulars | Amount (₹) |
|---|---|
| Balance as per Company Books | 1,20,000 |
| Add: Cheques issued but not yet cleared | 7,000 |
| Add: Bank charges not recorded in books | 500 |
| Less: Cheques deposited but not yet credited | (12,500) |
| Less: Direct debits not recorded in books | (1,000) |
| Balance as per Bank Statement | 1,14,000 |
📝 These types of outstanding cheques and deposits in transit are the main reasons for mismatch. They're completely normal and happen in every business.
📊 Bank Reconciliation Format in Excel
Here's a detailed bank reconciliation format in excel that tracks every transaction. This is perfect for small to medium businesses who want complete control.
Detailed Transaction Tracker (Excel Format)
Track every cheque, NEFT, and transaction with clearance status
| Date | Voucher No | Party Name | Cheque/Ref No | Type | Amount (₹) | Cleared On | Status | Remarks |
|---|---|---|---|---|---|---|---|---|
| 01-Jun-25 | P-00123 | XYZ Suppliers | 458972 | Payment | 25,000 | 03-Jun-25 | ✅ Cleared | Cleared after 2 days |
| 02-Jun-25 | R-00987 | ABC Traders | 478654 | Receipt | 32,500 | 06-Jun-25 | ✅ Cleared | Customer cheque deposited |
| 05-Jun-25 | P-00124 | TDS Payment | NEFT-123456 | Payment | 10,000 | 05-Jun-25 | ✅ Cleared | UTR: 123456ABCD |
| 06-Jun-25 | R-00988 | DEF Client | 457821 | Receipt | 18,000 | — | ⏳ Pending | Pending clearance |
| 08-Jun-25 | P-00125 | GHI Vendors | 459001 | Payment | 15,500 | — | ⏳ Pending | Issued yesterday |
📥 Bank Reconciliation Template (Downloadable)
This is a comprehensive bank reconciliation template used by professional accountants. It combines the statement format with transaction tracking.
Professional Reconciliation Template
Complete template with automatic calculation formulas
| Description | Debit (₹) | Credit (₹) | Balance (₹) |
|---|---|---|---|
| Opening Balance as per Books | — | — | 1,50,000 |
| Add: Items in Bank Statement but not in Books | |||
| Interest credited by bank | 2,500 | — | 1,52,500 |
| Direct deposit by customer | 5,000 | — | 1,57,500 |
| Less: Items in Bank Statement but not in Books | |||
| Bank charges | — | 500 | 1,57,000 |
| Loan EMI auto-debit | — | 10,000 | 1,47,000 |
| Add: Items in Books but not in Bank Statement | |||
| Cheques issued but not presented (Ch# 4589, 4590) | 12,000 | — | 1,59,000 |
| Less: Items in Books but not in Bank Statement | |||
| Cheques deposited but not cleared (Ch# 7821, 7822) | — | 18,000 | 1,41,000 |
| Closing Balance as per Bank Statement | 19,500 | 28,500 | 1,41,000 |
📊 Balance Sheet Reconciliation Template
For month-end and year-end closing, a balance sheet reconciliation template ensures all your bank accounts are accurate and audit-ready.
Balance Sheet Account Reconciliation Template
Reconcile all bank accounts for accurate financial reporting
| Bank Account | Account Number | Book Balance | Bank Statement Balance | Difference | Reason for Difference | Reconciled By | Date |
|---|---|---|---|---|---|---|---|
| HDFC Current Account | XXXX1234 | 5,45,000 | 5,45,000 | 0 | Fully reconciled | Amrut C. | 30-Jun-25 |
| ICICI Salary Account | XXXX5678 | 2,50,000 | 2,48,500 | 1,500 | Cheque#4521 not cleared | Priya S. | 30-Jun-25 |
| Axis Bank - CC Account | XXXX9012 | 8,75,000 | 8,75,000 | 0 | All transactions matched | Rahul K. | 30-Jun-25 |
| SBI Savings Account | XXXX3456 | 1,30,000 | 1,32,000 | -2,000 | Deposit in transit | Sneha M. | 30-Jun-25 |
| TOTAL VARIANCE TO BE RESOLVED | -500 | To be adjusted in books | |||||
📝 How to Prepare Bank Reconciliation Statement
Follow these steps to prepare a perfect bank reconciliation statement:
-
Gather Required DocumentsCollect your bank passbook/statement, cash book, cheque issue register, and cheque deposit register for the month
-
Compare Opening BalancesEnsure last month's closing balance in books matches with bank statement opening balance (after adjusting last month's BRS items)
-
Mark Matched TransactionsGo through each transaction in your books and tick off matching entries in bank statement. Use highlighters for easy identification
-
List Outstanding Cheques IssuedNote down all cheques you've issued that haven't appeared in the bank statement yet (these reduce your book balance but not bank balance)
-
List Cheques/Deposits in TransitIdentify all cheques you've deposited that haven't been credited yet (these increase your book balance but not bank balance)
-
Note Bank-Only TransactionsRecord bank charges, interest credits, auto-debits, or direct deposits that appear in bank statement but not in your books
-
Prepare the BRSUse Format 1 or Format 3 from above. Start with book balance, add/subtract reconciling items, and arrive at bank balance
-
Verify the MatchYour calculated balance should exactly match the bank statement balance. If not, recheck all entries
-
Make Adjusting EntriesPass journal entries in your books for bank charges, interest, or any other items that were in bank statement but not in books
-
File and Follow-upSave the BRS with supporting documents. Follow up on old outstanding cheques (>3 months old) with parties
⚠️ Why Most Accountants Skip This (And Why That's Dangerous)
I recently asked a few accountants about their BRS practices. The responses were... concerning:
"Oh, Tally does it automatically!" (Translation: "Tally automatic karate!")
"The previous accountant didn't maintain it properly, so I just skip it too..." (Translation: "Junna accountant correct maintain kelal nahi mahnun mi te tevat nahi...")
Many accountants take a dangerous shortcut: they directly enter balances from the bank statement without tracking individual cheques. This creates serious problems:
- Lost trail: You can't tell which cheques are pending or which bounced
- False confidence: Your books might show money "received" when it's not actually cleared
- Audit nightmares: No paper trail means auditors, bankers, or tax officials will grill you
- Cash flow blindness: You might write cheques thinking you have money, when those funds are still in transit
- Fraud risk: Without reconciliation, fraudulent transactions can go undetected for months
🧑💼 Who Should Maintain BRS?
If you fall into any of these categories, BRS isn't optional—it's essential:
- Any business with a current account: If you're issuing cheques regularly, you need BRS
- Retailers and traders: Especially those dealing with post-dated cheques from customers
- Service businesses: Consultants, agencies, and professionals who receive payments via cheque or bank transfers
- NGOs and trusts: Donor accountability requires clean bank reconciliation
- E-commerce sellers: Payment gateway settlements need to match your books
- Exporters/Importers: Foreign currency transactions and FEMA compliance requires detailed BRS
- Startups seeking funding: Investors want to see clean financial discipline
🗓️ How Often Should You Reconcile?
The frequency depends on your transaction volume. Here's what works for different business types:
| Type of Business | Recommended Frequency | Why |
|---|---|---|
| Small retail/service business | Monthly | Manageable volume, end-of-month clarity |
| Medium enterprises | Bi-weekly | Catches issues before they snowball |
| E-commerce/Exporters | Weekly | High transaction volume needs tight control |
| Large companies | Daily or Weekly | Real-time cash flow management |
| Freelancers/Consultants | Monthly | Lower volume, simpler tracking |
My recommendation: Start with monthly reconciliation. Once you get comfortable, move to bi-weekly. The peace of mind is worth the 30 minutes it takes.
🧲 How to Reconcile Bank Statement in Tally
If you're using Tally, here's the step-by-step process:
-
Enable Bank Reconciliation FeatureGo to F11 (Features) → F1 (Accounting Features) → Enable "Maintain Bank Reconciliation"
-
Pass Cheque Entries ProperlyWhen recording payments/receipts, enter cheque numbers, dates, and complete party details. Never skip the instrument details
-
Open Bank BookNavigate to: Gateway of Tally → Display More Reports → Statement of Accounts → Bank Books
-
Start ReconciliationPress F5 (Reconcile) while viewing the bank book. Tally will show all unreconciled transactions
-
Mark Cleared TransactionsEnter clearance dates from your actual bank statement for each transaction. Press Y to mark as reconciled
-
Verify Reconciled BalanceTally will automatically show the adjusted balance matching your bank statement. Check if it matches exactly
-
Print BRS ReportPress Alt+P to print the Bank Reconciliation Statement. Keep this for your records and audit trail
Common mistake to avoid: Don't skip entering cheque numbers. Without them, Tally can't properly track which transactions have cleared. Also, never directly edit bank balances—always reconcile properly.
❓ Frequently Asked Questions
Q1 What is the purpose of a bank reconciliation statement?
BRS explains any difference between your book balance and bank balance. It's your proof that you know where every rupee is—whether it's in transit, pending clearance, or already settled. It helps catch errors, prevent fraud, and maintain accurate financial records.
Q2 How often should I do bank reconciliation for my business?
For most small businesses, monthly reconciliation is enough. High-volume businesses (e-commerce, exports) should reconcile weekly. The key is consistency—pick a schedule and stick to it. Never skip more than one month.
Q3 Can I use Excel instead of Tally for BRS?
Absolutely! We've provided multiple Excel formats in this article (Format 2 and Format 3). Excel is often simpler for small businesses and gives you complete control over your tracking. Download the templates above and customize them for your needs.
Q4 What causes mismatches in bank reconciliation?
The most common reasons are: uncleared cheques (you issued them but they haven't been cashed yet), deposits in transit (you deposited but bank hasn't credited), bank charges you didn't record, interest credits from the bank, direct debits/credits, and occasional data entry mistakes.
Q5 Is BRS mandatory during audits or loan applications?
While not always legally mandatory, auditors and banks expect proper BRS records. Clean reconciliation shows financial discipline and makes loan approval much easier. I've seen loan applications rejected simply because the BRS was messy or missing. It's also required for statutory audits under Companies Act.
Q6 What is the difference between bank book and bank reconciliation statement?
A bank book (or cash book - bank column) records all bank transactions as per your company records. A bank reconciliation statement is a separate document that explains why the bank book balance doesn't match the bank statement balance. BRS is the bridge between the two.
Q7 How do I handle old outstanding cheques (>6 months)?
For cheques older than 6 months: (1) Contact the party to present the cheque or request a new one, (2) If party confirms non-receipt, issue a fresh cheque and cancel the old entry, (3) If party received but lost it, issue duplicate after getting indemnity, (4) For stale cheques (>3 months), banks won't clear them anyway, so reverse the entry and reissue.
Q8 Can I download a free bank reconciliation template?
Yes! All the formats in this article have Download CSV buttons. Click any "⬇️ Download CSV" button to get the template. You can open CSV files in Excel, Google Sheets, or any spreadsheet software and customize them for your business.
✍️ Final Thoughts
Bank reconciliation isn't some boring accounting ritual—it's your financial early warning system. It tells you when something's off before it becomes a crisis.
Start simple. Pick one format from this article—whether it's the standard BRS format, the detailed Excel tracker, or the professional template. Download it, customize it for your business, and commit to reconciling monthly.
Set a calendar reminder. Make it part of your month-end routine, just like closing your books. The first time might take you 2 hours. The second time, maybe 1 hour. By the third month, you'll finish it in 30 minutes flat.
Your future self (and your CA) will thank you when audit season rolls around. Trust me on this one.
Related articles you might find helpful:
Subscribe to Learn with Amrut on YouTube for weekly GST, Income Tax & Finance content in simple language.