It is Tuesday night. The PTA meets on Thursday and the chair wants to know how much is in the account. You open the online banking and it says one figure. You open the cash book and it says another. The difference is £84.20, and you have no idea whether it is a missing receipt, a double entry or the bring-and-buy money that went into the wrong place in March.
If you have been there, you are not bad at this. Most volunteer treasurers inherit a spreadsheet and a shoebox of receipts, and nobody told them the bank is supposed to be checked against the books every month. This post sets out a routine for doing that check, and what to write down so the next treasurer or the independent examiner can follow it without ringing you.
What reconciling means in plain terms
Reconciling means matching each line on the bank statement to a line in your cash book. If the statement shows a payment of £45.00 to the hall hire company on 4 March, you find the line in the cash book for the same amount and date, and you tick both. Do that for every line and you end up with two lists: the things that match, and the things that do not.
The bank balance and the cash book balance should then agree once you allow for anything that has gone through the books but not yet through the bank, and anything that has gone through the bank but not yet into the books. That is the whole idea. It is not an accounting exercise. It is checking that your records describe what actually happened to the money.
A simple monthly routine
A routine that fits into one evening looks like this.
First, get the statement. Download it from online banking for the whole month, or print the last one, so you are working from the same period as the cash book. Check the opening balance on the statement matches the closing balance you recorded last month. If it does not, stop and find out why before going further.
Second, tick off what matches. Work down the statement line by line. Each tick means one bank line and one cash book line for the same amount, close in date, and clearly the same transaction.
Third, list what does not match. Anything left unticked on either side goes on a short list: the bank side, the book side, the amount and a few words of explanation. Keep this list on the same page as the reconciliation so nobody has to hunt for it.
Fourth, explain the difference. Add up the unticked items on each side and show how they account for the gap between the two balances. If the numbers do not reconcile, the gap is still unexplained and you should say so, rather than forcing an entry to make it balance.
Done properly, this takes one evening a month for a club with a few hundred transactions a year. Done quarterly, it takes a weekend and most of the will to live. Monthly is kinder to your future self.
Common small-club causes of a mismatch
Most differences come from a short list of causes.
A cheque not yet cleared is the classic. The cheque went into the cash book on the day it was written, but the bank has not taken it yet. It sits on the book side as unpresented, and the bank balance is higher than the book balance by that amount. Keep a note of it and check it clears next month.
A card payment for the fair is another. The stallholder took cards on the day, the card machine batched them, and the money reached the bank as one lump two days later, minus fees. Record the gross takings in the cash book, then record the fee as a separate line, so the bank line can be matched without guesswork.
A transfer with no reference causes trouble because the statement shows a name or a bank code and nothing else. Look at the date and amount, ask the person who made the transfer, and write the explanation in the cash book so the next person does not have to ask again.
A donation paid into the wrong fund is the one that causes the most arguments. A £200 cheque from a member might be meant for the roof appeal but was banked to general funds because it arrived with the subs. The bank is right that the money is in the account. Your cash book has to move it to the correct fund with a note of why. This is also where restricted funds become important.
Handling restricted funds so a grant is not spent by accident
Suppose a sports club receives a £3,000 grant to replace the changing room roof, and the grant letter says the money can only be used for that purpose. If that money sits in the same balance as everything else, a committee member may spend it on the bar float without anyone noticing until the roof contractor sends an invoice.
Keep restricted money in its own fund in the cash book. Every receipt against that grant goes to the restricted fund. Every payment for the roof goes out of it. At reconciliation, check that the restricted fund balance matches what you expect from the grant letter and the invoices, and that the total of all funds still matches the bank. If the fund goes negative, something has been paid from the wrong place and needs correcting.
Vasker's Free plan gives you a starter cash book with one fund. For a restricted grant alongside general money you need Standard, which covers full books and funds, and reports for the committee. This is a planning point rather than advice on how your own grant should be handled. Check the terms of the grant and the current Charity Commission, OSCR or CCNI guidance for your organisation.
What to write on the reconciliation
The reconciliation is only useful if someone else can follow it. Write it so a stranger could pick it up in a year.
Record the statement period, the opening and closing bank balances, and the cash book balance at the same date. List each unmatched item with its date, amount and a plain reason, such as "cheque 214 to village hall, not yet cleared" or "card takings from summer fair, batched 28 June, received 1 July". Add the date you completed the reconciliation and your name.
Keep the statement and the reconciliation together in the same folder or the same file. The examiner will ask to see both, and the next treasurer will thank you for it. Good records also matter for Gift Aid: HMRC expects records to be kept for at least six years, so the trail you build now is the trail that answers a question later. This is general information, not tax advice.
Where Vasker fits
Vasker is bookkeeping and Gift Aid for unpaid UK treasurers of clubs, charities, PTAs, Scout groups and CASCs. The cash book, funds and reports sit on Standard at £59 a year. You can match bank lines against the cash book, move money between funds with a note, and produce a committee report from the same records. The Free plan gives you a starter cash book with one fund, which is enough to try the monthly routine on your own organisation before you decide anything.
Vasker's cash book needs a connection. It is a web app, with an App Store and Google Play client and a PWA install, but you cannot do the bookkeeping offline and we do not promise that you can.
If you want to try the routine on your own figures, create your free account and start with one month. Set up the starter cash book, tick the first statement, and see whether the difference is still on the list when you finish. Reconciling properly does not guarantee a clean independent examination, but it does mean that when the examiner asks, the answer is already written down.