Kolleno Payments
A reliable bank reconciliation process gives finance teams the confidence to close the books, report results, and manage cash flow effectively. But when problems creep in, like unrecorded transactions, timing mismatches, or outdated internal records, they can undermine the entire process.
Below, we explore five common reconciliation issues and offer practical advice on how to prevent them. Whether you’re reconciling manually or using automation, these tips will help you keep your financial records clean and compliant.
What Is a Bank Reconciliation Statement?
A bank reconciliation statement is a document that compares the transactions recorded in your company’s internal financial records with those shown on your bank statement. The goal is simple: make sure the balances match, and explain any differences.
This process is a vital part of maintaining financial accuracy. It helps finance teams catch unrecorded transactions, spot unauthorized withdrawals, and confirm that bank fees, payments, and deposits have all been accounted for correctly. When done well, it provides a clear view of your true cash position and supports more accurate financial statements.
The statement typically includes your opening balance, the list of transactions for the period, any outstanding checks or electronic payments not yet cleared by the bank, and the closing balance. Any discrepancy between the bank’s records and your own needs to be identified, explained, and resolved before the books are closed.
5 Common Bank Reconciliation Problems—and How to Solve Them
Even small issues can cause major delays during the reconciliation process, especially when you’re working across multiple bank accounts or high transaction volumes. Below are five of the most common bank reconciliation statement problems, along with practical steps to fix them.
1. Missing or Unrecorded Transactions
Bank fees, wire transfers, or deposits may appear on your bank statement but not in your internal system. These unrecorded transactions can lead to discrepancies between your bank balance and cash book balance.
The fix: Reconcile frequently, ideally daily, to catch these early. Use reconciliation software that automatically imports bank data and flags unmatched items. Review your banking import history and make sure all bank charges and interest payments are logged as they occur.
2. Duplicate Entries or Payments
Manual entry, poor coordination, or delays in system syncing can cause the same transaction to be recorded more than once. These duplicate transactions inflate expenses or overstate payments.
The fix: Use validation checks in your accounting system to prevent duplicate entries. Limit who can process payments, and automate your customer payment tracking to ensure transactions are recorded once—and only once.
3. Data Entry Errors
Mistyped numbers, incorrect dates, or misplaced decimals are classic examples of manual errors that lead to mismatches in the bank reconciliation statement.
The fix: Automate wherever possible. When manual input is unavoidable, use predefined templates, lock fields that don’t change, and build in approval steps. Always double-check opening balances and use the same cutoff dates as your bank records.
Suspicious or unauthorized transactions may go unnoticed until reconciliation uncovers them. These could be external fraud or internal misuse—both impact your financial statements.
The fix: Enforce strict internal controls and segregation of duties. The same person should never initiate and approve payments. Reconcile regularly to detect potential fraud quickly, and investigate any unusual or unapproved withdrawals.
5. Timing Differences and Outstanding Items
Outstanding checks, electronic payments, or delayed deposits often result in mismatches between your internal ledger and the bank statement, even when both are correct.
The fix: Keep detailed notes on expected clearing times. Use reconciliation tools that support flexible matching—based on amount, vendor, or description rather than date alone. Always compare the statement balance to your adjusted internal balance, accounting for items still in transit.
How to Improve Your Bank Reconciliation Process
Fixing individual issues is one thing—but building a smoother, more reliable reconciliation process requires proactive steps. Whether you’re dealing with high volumes or just trying to close faster, these best practices can help you reduce errors, improve efficiency, and protect your financial records.
Start by introducing consistent procedures. Define who’s responsible for reconciling each bank account, how often it should happen, and what steps need to be followed. Consistency makes it easier to spot anomalies and improves accountability.
Next, reduce your reliance on manual reconciliation. Automated tools can import bank data directly, match transactions in real time, and flag issues like duplicate payments, unrecorded bank fees, or unauthorized withdrawals before they reach your books. This cuts down on manual data entry and frees up your team for more valuable work.
Finally, integrate your reconciliation software with your wider accounting system. That way, your internal records, bank statements, and general ledger stay aligned—without constant back-and-forth or spreadsheet juggling. This not only improves financial accuracy, but also strengthens your cash flow management and audit readiness.
How Kolleno Helps Finance Teams Solve These Problems
While NetSuite and other ERPs offer built-in tools for reconciliation, they often fall short when you’re dealing with high transaction volumes, multiple entities, or fragmented data. That’s where Kolleno adds real value.
Kolleno automates the entire bank reconciliation process, from importing bank data to matching transactions and flagging exceptions. Its intelligent transaction matching engine goes beyond basic amount/date logic. It looks at payment references, customer behaviour, and invoice history to identify the right match, even when the details aren’t perfect.
It also helps prevent common issues like duplicate transactions, unrecorded bank fees, and unauthorized withdrawals. Every match, adjustment, and exception is logged automatically, giving you a complete audit trail and reducing reliance on manual reconciliation.
And because Kolleno integrates directly with your general ledger and accounting tools, your financial records stay accurate and up to date, without the back-and-forth. It’s a smarter, more scalable way to manage reconciliation and improve your team’s visibility into cash flow and overall financial health.
Final Thoughts
Even the most experienced finance teams run into problems with their bank reconciliation statements. From missing transactions to duplicate payments and unauthorized withdrawals, these issues can slow down your close, distort your financial records, and weaken your cash flow management.
But they’re also preventable. With the right controls, better processes, and the support of modern reconciliation software, you can eliminate errors before they start—and gain a clearer picture of your company’s financial position.
Kolleno helps finance teams reconcile faster and reduce manual work, while reducing errors. Book a demo today to see how it works.
