First, what “ties” means
A statement ties when this comes out to exactly zero:
statement ending balance
+ deposits in the books that haven’t reached the bank
− checks and payments in the books that haven’t cleared
− book balance on the statement date
Whatever is left is the difference. Some of it is explained by things the bank shows that the books don’t yet: fees, interest, returned payments, autopays. Record those and look again. What’s still left after that is what this guide is about.
Read the amount before you read the transactions
The size of the difference often tells you what kind of mistake it is.
| If the difference… | Look for |
|---|---|
| equals one transaction exactly | That item missing from one side, or entered twice on one side. |
| is twice a transaction’s amount | That item entered with the wrong sign: money in recorded as money out, or the reverse. |
| divides evenly by 9 | Two digits swapped (54.10 typed as 45.10), or a decimal point in the wrong place (1,250.00 typed as 125.00). |
| is a round number | One digit typed wrong (1,250.00 entered as 1,350.00), or a transfer recorded on one side only. |
| is the same as last month’s | Last month never tied. The difference carried forward. |
Why 9 works: swapping two digits, or sliding a decimal point, always changes a number by a multiple of 9. 54.10 − 45.10 = 9.00. 1,520 − 1,250 = 270, which is 9 × 30. 1,250.00 − 125.00 = 1,125.00, which is 9 × 125. Work in cents and the rule holds to the penny. It doesn’t prove a swap, but it tells you to look for one.
The eight usual places
- The two sides cover different dates. The book balance must be as of the statement’s ending date, and the bank file and the books report must cover the same days. One extra day of activity on either side throws everything off.
- Something at the bank was never recorded. Monthly fees, interest, returned tenant payments, autopays. These explain part of the difference, but only once they’re actually entered.
- An item went in with the wrong sign. A refund entered as a payment, a reversal entered as a deposit. Off by twice the amount.
- Digits swapped or a decimal slid. The divisible-by-9 case. Compare the bank’s amount with the books’ amount line by line for anything that looks close but not exact.
- A check cleared for a different amount than was written in the books. If the bank shows the check number, compare the cleared amount with the entry and the check image.
- A void on one side only. A check voided in the books that the bank still paid, or a reissued check where the original was never voided.
- An entry made after the fact. Someone back-dated a transaction into a month that was already reconciled. The month that tied no longer ties.
- Last month didn’t tie. If the opening position was off, this month inherits it. Fix the earliest month that doesn’t tie first, then come forward.
Never plug it
A plug is an entry that makes the difference disappear without explaining it. It hides the mistake, and the next person to look inherits a reconciliation that says it ties when it doesn’t. If you can’t find it today, leave the difference showing, write down what you’ve ruled out, and come back to it.
Stop it happening
Compare the bank and the books weekly, not just at month-end, so every difference is small and recent. Chase anything outstanding for more than 30 days. And don’t back-date into a closed month: if you must change one, reopen it on purpose and tie it again. The full method is in the free playbook, and there’s a printable tie sheet.