The problem: the bank and the cash book disagree
The bank balance says £2,314.60. Your cash book says £2,300.40. The committee meets on Thursday, and the gap is £14.20. Nobody has asked yet, but somebody will.
If you are the treasurer of a PTA, a village hall, a Scout group or a small club, this is probably a familiar evening. The figure is small enough to ignore and large enough to stop you sleeping. The good news is that a gap like this is almost always explainable. The bad news is that you can only explain it if you have been checking the bank against the books every month, not just at the year-end.
This piece sets out a simple monthly routine for doing that check. It takes about half an hour once you have a rhythm. It does not need accounting training, and it does not need a spreadsheet with forty tabs.
What reconciliation means, in kitchen-table terms
Reconciling the bank means matching each line on the bank statement to an entry in your cash book. That is all it is.
Take the bank statement and a list of what you think happened in the same period. For each line on the statement, find the matching entry in the cash book. A payment of £45.00 to the hall hire company should appear in the bank and in the books, on roughly the same date, for the same amount. When you find the pair, you tick both. When you have ticked everything you can, whatever is left over on either side is unmatched. Those unmatched items are what explain the difference.
The point is not to make the two numbers agree by adjusting one of them. The point is to understand why they differ. Sometimes the difference is a timing issue: a cheque has been written but not yet cleared. Sometimes it is a mistake: an entry was typed twice. Each of those needs a different response, and the committee deserves to know which is which.
A 30-minute monthly routine
This is the routine that works for most small organisations. Do it on the same day each month, once the bank has posted the previous month's activity. The first Monday is a good choice for many people.
- Download the statement. Get the latest statement from your online banking, or the printed version if your bank still sends one. Note the opening and closing balances.
- Tick off. Go down the statement line by line. For each item, find the matching cash book entry and tick both. Work in date order. Most items match within a few days of each other.
- List what is unmatched. Make two short lists: bank items with no cash book entry, and cash book entries with no bank item. These are your reconciling items.
- Explain the difference. Add up the unmatched items on each side. The difference between the two closing balances should equal the net of those items. If it does, the reconciliation is complete. If it does not, you have a missed entry or a typing error to find.
- Write one line per item. Keep a short note beside each unmatched item saying what it is and what you expect to happen next. "Cheque 214 to the printer, not yet cleared, expected next week" is enough.
Keep the statement, the tick marks and the list together in one folder. You will be glad of them later.
Common culprits in a PTA or club account
Most differences come from a small set of causes. In a PTA account, these are the ones that turn up again and again.
A cheque not yet cleared. The cheque is in the cash book on the date it was written. It does not appear on the bank statement until it is presented. This is the most common reason the cash book shows less than the bank, and it usually resolves itself within a few weeks. Keep a note of the cheque number and chase it if it is still outstanding after about six weeks.
A card payment from the bar or the tuck shop. A card terminal often settles a day or two after the sales, and it may settle the total net of charges. If the cash book records gross takings and the bank shows the net amount, the difference is the card charges. Record the charges as an expense so the two sides can match.
A duplicate entry. Someone has typed the same invoice twice, or entered a payment in the cash book and again from the bank feed. Duplicates make the cash book show less money than the bank. Look for pairs with the same amount and date before you assume anything more complicated has happened.
A refund. A refund to a parent for a cancelled trip, or a supplier credit, often appears on the statement as money coming in. If the cash book does not record it, the bank will show more than your books do. Record the refund against the original payment so the money is accounted for in the right place.
In the example above, the £14.20 turned out to be a card settlement that had been recorded in the cash book at the gross sales figure, with the card charge netted off by the bank. Once the charge was recorded as a bank charges line, the two balances agreed. The figure is illustrative, but the pattern is very ordinary.
Keeping restricted funds visible
If your PTA or village hall has received a grant for a specific purpose, such as a new playground or a hall roof repair, that money is restricted. It must be spent on the purpose the funder agreed. It is easy to lose track of this when everything sits in one bank account.
Keep restricted funds visible in the cash book. A separate fund for each grant or restricted gift lets you see at a glance how much is committed and how much is free for general use. When a payment comes out of the account, it should be allocated to the right fund at the point you record it, not later.
During reconciliation, check that the fund balances add up to the bank balance. If they do not, a payment has probably been allocated to the wrong fund, or a grant has arrived and not yet been recorded against its purpose. Catching this monthly is far easier than discovering it when the funder asks for a report.
This is general treasurer practice, not legal or tax advice. Check your grant conditions and the guidance from your regulator for the exact rules that apply to your organisation.
What to show the committee
The committee does not need the full statement or every tick mark. It needs a short, clear picture of the month. A one-page summary works well, and it should show:
- the opening balance at the start of the period
- total receipts, grouped in a few sensible headings such as subscriptions, events and grants
- total payments, grouped the same way
- the closing balance
- any reconciling items, with a one-line explanation of each
The last line is the one that builds trust. If you can say "the bank is £14.20 higher than the books because of a card charge we have now recorded, and a cheque for the printer is still outstanding", the committee can move on. Committees are much less worried by a known difference with a reason attached than by a balance that nobody can explain.
Keep the summary to the same format each month. Consistency makes it easy for members to spot a change.
Why a tidy monthly tick helps at year-end
The year-end is where small irregularities become large problems. An independent examiner, or the committee preparing the annual figures, will want the cash book to agree with the bank at the year-end date and to explain every movement along the way. If you have ticked the account every month, that work is already done. Each month's reconciliation is a snapshot you can point to.
If you have not, the year-end becomes a search through twelve months of statements for a difference that has been growing quietly. That is where evenings disappear, and where a sensible handover to the next volunteer becomes much harder. A treasurer who leaves a folder of monthly reconciliations with signed-off notes has done the next person a real kindness.
Monthly reconciliation does not guarantee an examiner finds nothing to comment on. It does make the questions easier to answer, and it means you are not reconstructing the year from memory.
How the Vasker cash book supports this
Vasker is bookkeeping for unpaid treasurers. The cash book is where the monthly routine above takes place: bank lines are matched to entries, unmatched items are listed, and funds keep restricted money separate from general money. The reports give the committee the opening balance, receipts, payments and closing balance in one view.
The cash book needs a connection to work, so it is not something to rely on offline. The free plan covers a starter cash book with one fund, which is enough to try the routine on a single account. The Standard plan, at £59 a year, adds full books and reports, so you can keep several funds and produce the committee summary without rebuilding it each month.
You can try this for your own organisation. Start free: create the organisation from Sign up in a few minutes. There is no sales call and no setup fee, and you can try the starter cash book before you decide whether anything else is worth paying for.
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