Bank Reconciliation Guide
How to reconcile a bank or credit card account in DynaTax AI: start from a statement, clear transactions against it, resolve differences with adjusting entries, and complete the reconciliation so the period is locked.
What Bank Reconciliation Is
Bank reconciliation is the process of checking your books against a bank statement: you confirm that every transaction on the statement is in your books, that nothing extra crept in, and that the balances agree. Doing it monthly catches errors, duplicates, and missing transactions while they are still easy to fix.
- Detect errors: catch data-entry mistakes, duplicates, and missing transactions
- Spot problems early: unexpected charges stand out when you clear line by line
- Accurate financials: reports are only as trustworthy as reconciled accounts
- Audit readiness: a completed reconciliation documents that the books match the bank
Starting a Reconciliation
In the client portal, open Banking → Reconciliation and start a new reconciliation for the account and statement period you want to reconcile. Have the bank statement for that period in front of you.
- Choose the account (checking, savings, or credit card).
- Confirm the beginning balance. DynaTax AI suggests it automatically from your prior reconciliation, so it usually just matches the statement. If you need to override it, you'll be asked to provide a reason — the override is kept for the audit trail.
- Enter the statement ending balance and the statement end date from your bank statement.
Clearing Transactions
The workspace lists the transactions in your books for the period. Work down your bank statement and toggle each transaction clearedwhen you find it on the statement; leave it uncleared if it hasn't hit the bank yet (an outstanding check or a deposit in transit). As you clear items, the workspace tracks the difference between your cleared balance and the statement ending balance — the goal is a difference of zero.
You don't have to finish in one sitting: Save for later keeps the reconciliation in progress so you can pick it back up. When everything is cleared and the difference is zero, use Finish now / Complete Reconciliation to close it out.
Handling Discrepancies
Common situations and how to resolve them inside the reconciliation:
- Outstanding checks and deposits in transit: normal timing differences — leave them uncleared; they will clear in a future statement period.
- Bank fees and interest not in your books: use the Adjust button in the reconciliation to record an adjusting entry for the difference — it is designed for small items like bank fees, interest, and rounding differences, and posts them without leaving the workspace.
- Transactions missing from the workspace: if transactions were imported or restored after the reconciliation was started, use Sync Items to pull them into the reconciliation.
- Duplicates: DynaTax AI runs duplicate detection on imported transactions; if a duplicate still slips through, remove it from your books and the difference will resolve.
Completing & Locking
When the difference is zero, complete the reconciliation. A completed reconciliation is locked — the workspace shows a "Reconciliation Completed & Locked" banner, and the cleared transactions can no longer be changed from within it. Each account keeps a reconciliation history, and you can generate a reconciliation report for your records.
The Professional Workspace
When a bookkeeper or accountant reconciles on your behalf, they use the professional reconciliation workspace, which adds a few tools on top of the flow above:
- Auto-Match: smart matching that pairs statement lines with book transactions using amount, date, and description similarity, so the preparer only handles the leftovers by hand.
- Review workflow: a preparer can submit a finished reconciliation for review, and a reviewer can approve it or send it back with a rejection reason.
The client-portal flow described in this guide does not include Auto-Match — you clear transactions against the statement directly, which for a monthly statement is quick and keeps you close to the numbers.
Frequently Asked Questions
How often should I reconcile?
Monthly, matching your statement cycle. Reconciling every month keeps each session short and means errors are at most a few weeks old when you find them.
Why doesn't my beginning balance match the statement?
The beginning balance comes from your prior reconciliation. If it doesn't match, something changed in an earlier period — check the account's reconciliation history first. You can override the beginning balance with a reason, but it's better to find and fix the underlying change.
Can I reconcile credit cards the same way?
Yes — the flow is identical. Reconcile against the credit card statement ending balance, and treat charges and payments the same way you treat withdrawals and deposits on a bank account.
What if I can't get the difference to zero?
Check for statement lines missing from your books (use Sync Items if they were imported after you started), duplicates, and transposition errors ($1,234 entered as $1,243). For small residual items like a bank fee or interest, record an adjusting entry with the Adjust button. If you're still stuck, save for later and ask your accountant to take a look.