What is a bank reconciliation statement (BRS) and how do I prepare one?
A bank reconciliation statement (BRS) is a summary that reconciles an entity's bank account with its own financial records: matching the balance shown on the bank statement against the balance recorded in the cash book. You prepare one by comparing the two balances, checking off matching entries, correcting any errors found in the cash book, then listing the remaining differences (like cheques issued but not yet presented) to explain the gap.
Steps to prepare a BRS
A Vyapar guide on this question lays out the process in stages.
- Compare the balance on the bank statement with the bank column of the cash book.
- Compare the credit side of the bank statement against the debit side of the cash book's bank column, and the debit side of the statement against the credit side, to find entries that don't line up.
- Look through both the cash book's bank column and the bank passbook for entries that were missed when posting.
- Correct any mistakes or errors found in the cash book.
- Calculate the corrected, revised balance of the cash book's bank column.
- Start the bank reconciliation statement from that updated cash book balance.
- Add unpresented cheques (issued but not yet cleared by the bank) and deduct uncredited cheques (deposited but not yet cleared).
- Make any remaining adjustments for bank charges or other bank-only entries.
FAQs
Why would the bank balance and cash book balance differ in the first place?
Usually because of timing (a cheque issued but not yet presented, a deposit not yet credited by the bank) or because an entry was missed when posting to the cash book.
What's an "unpresented cheque" in a BRS?
A cheque you've issued and recorded in your books, but which the payee hasn't yet presented to the bank for payment: it's added back to the cash book balance when building the BRS.
Do I need to redo a BRS every month?
Yes, it's a periodic check, typically monthly, since new timing differences (fresh unpresented cheques, uncredited deposits, bank charges) appear every period.
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Last reviewed 2026-10-15
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