# Bank Reconciliation: What Good Actually Looks Like

Canonical: https://taxmo.co.uk/blog/bank-reconciliation-what-good-looks-like
Published: 2026-08-06
Tags: Bookkeeping, Reconciliation

Reconciliation has a reputation as a chore for people who like tidiness. It is actually the only check that catches an entire class of error, because it compares your records against something you did not write.

## Why it catches what nothing else does

Every other check in bookkeeping compares your records against your records. A trial balance proves your entries are internally consistent; it cannot tell you an entry is missing entirely.

The bank statement is independent evidence. Matching against it is the only routine step that finds something you never recorded at all.

## The four things you find

Discrepancies fall into a small number of categories, and each means something different.

- In the bank, not in your records: usually a cost you forgot, which is money you are not claiming
- In your records, not in the bank: often a payment that failed, or an invoice marked paid that was not
- Different amounts: a typo, or a fee deducted that you did not account for
- Duplicates: the same transaction entered twice, which overstates whichever side it lands on

## Imported does not mean reconciled

A bank feed removes the typing. It does not decide what a transaction was for, and until you review it the transaction is not in your figures.

This is a genuine trap with automated imports: the data looks present because you can see it on screen, while it is still sitting unapproved and outside your VAT return. Anything that reports a return as ready while imports are pending is not doing you a favour.

> Treat pending imports as a blocking problem before filing, not a tidy-up task for afterwards. They are the difference between a return that is right and one that looks right.

## How often

Monthly is enough for most sole traders, and it should take minutes once the feed is doing the import. Leaving it to the quarter end means reconstructing what a payment from ten weeks ago was for, which is where guesses enter the record.

The habit matters more than the frequency. A reconciliation you do every month beats a thorough one you do twice a year.

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