How often an advice practice should reconcile its bank
Why monthly is the floor for an advice practice's bank reconciliation, when weekly or daily is wiser, and why small differences are never booked away.
By Achekam · · 5 min read · For Financial services businesses in South Africa, Nigeria, Kenya
In a small advice practice, the bank account is the one record everyone trusts. Fees come in, salaries and rent go out, and the balance on the banking app seems to say all that needs saying. So the reconciliation slips: done "when the accountant asks", which often means once a year, in a hurry, with nobody remembering what a transfer from eleven months ago was for.
The question is not whether to reconcile but how often, and the honest answer depends on what flows through the account. This article sets out the minimum, the cases where the minimum is not enough, and how a practice in South Africa, Nigeria or Kenya can make the routine quick enough that it actually happens.
What a reconciliation actually proves
AccountingTools describes the bank reconciliation process as comparing the internal and bank records for a bank account and adjusting the internal records to bring the two into line, so that the recorded cash balance is accurate.
That last phrase is the point. The balance on the bank's app tells you what the bank has processed. The balance in the books tells you what the practice has recorded. Until the two agree, line by line, neither your income statement nor your view of who still owes you fees can be relied on. Investopedia goes further, identifying reconciliation, the comparing of data sets, as the most important detective control, with corrective action taken when material differences are found. For a small practice without an internal audit function, it is often the only detective control there is.
Monthly is the floor
AccountingTools states that bank reconciliations should be performed at least monthly, typically when the bank statement is received. For a practice with a modest number of transactions, a monthly reconciliation done within a few days of month end is a sensible baseline:
- the statement period is short enough that every line is still remembered;
- errors are caught before they roll into the next month's figures;
- the monthly management accounts rest on a cash balance that has been checked.
If the practice currently reconciles less often than monthly, moving to monthly is the single most useful change it can make to its books.
When monthly is not enough
The same AccountingTools guidance says reconciliations should be done more often, weekly or even daily, for organisations with high transaction volumes, significant cash balances or elevated fraud risk. Each of those can apply to an advice practice:
- High volumes. A practice billing many clients monthly retainers by debit order, or collecting many small fees, can face a long list of receipts every month. Matching them weekly keeps the debtors list honest.
- Significant balances. A practice holding a large amount in its operating account, perhaps before a tax payment or a distribution to partners, has more to lose if something goes wrong unnoticed.
- Fraud risk. If one person handles payments and also keeps the books, or if the practice has recently had a suspicious payment request, more frequent reconciliation shortens the time a fraudulent payment can sit unseen. A good companion read is who should reconcile a consultancy's bank account.
A reasonable pattern for many practices is to match lines weekly and complete the formal reconciliation at month end.
Why a small difference is not booked away
Every bookkeeper has met the reconciliation that is out by a trivial amount, and the temptation to post it to sundry expenses and move on. AccountingTools generally does not recommend simply booking a small unexplained difference, because even a slight variance could indicate a major problem.
A small net difference can be two large errors that nearly cancel: a fee receipt recorded twice and a supplier payment not recorded at all. Booking the net amount away hides both. Find the cause first; the AccountingTools guide to the bank reconciliation process walks through the steps and the common causes of differences.
How the routine runs in Achekam
Achekam is built around a person doing the reconciliation, with the tedious parts taken off their hands.
Importing the statement. A practice imports bank statements as PDF, CSV, Excel, OFX, QIF, MT940 or CAMT.053, which covers what most banks in the three countries provide for download. Each import is checked so that the opening balance plus the movements equals the closing balance, so a partial download or a missing page is caught before any matching starts. Where the workspace has an AI model configured, it can read scanned or unrecognised PDFs, and every amount it reads must appear on the page.
Matching and journals. Bank lines are matched by suggestion and a person accepts each match. A line not yet in the books, such as a bank charge or interest, becomes a suggested journal that a person approves. Nothing is posted on the strength of a suggestion alone.
Finishing. A reconciliation completes only when the difference is fully cleared or every leftover line is explained. There is no option to force it through with an unexplained amount, which puts the AccountingTools advice into the software itself.
Close the month only once the bank agrees
Achekam lets a business soft-close, hard-close and lock a month. A closed month refuses postings from every source, and reopening a hard close needs a second approver. Before closing, the screen checks the ledger balances and that no posting suggestions, unposted bills or unmatched bank lines are waiting.
That check makes the order of work clear: reconcile, then close. Once the month is locked, its figures stop moving, which is what partners and the accountant need when they read the results. How locking works in an advice practice is covered in locking a month once its figures are reported, and what to look for once the bank is right is in reading your trial balance before the accountant does.
Setting your own rhythm
Look at last month's statement and count the lines. If you can reconcile them comfortably in one sitting, monthly will do, provided it happens within days of month end. If the count is high, if the balance is large, or if one person controls both payments and records, put a weekly matching session in the diary and keep the month-end close as the formal sign-off.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
