How to check cash and bank balances at day end
Compare a cash count and bank statement with recorded movements to find missing expenses, wrong accounts and duplicate receipts.
Check each account in its own currency and the same time period. Count physical cash and compare the bank account with its statement. Investigate differences before adjusting balances. This guide describes manual checking, not an automatic bank connection.
Step-by-Step Implementation
1. Match the comparison period
Identify opening balance and checking time. Note pending bank transactions or next-day settlements separately; yesterday's statement cannot be compared directly with today's live balance.
2. Match individual movements
Compare receipts, payments, expenses and transfers by date and amount. Do not enter an invoice payment again as income. Moving cash to a bank does not increase total business funds.
3. Explain and correct the difference
Correct a missing expense or a transaction assigned to the wrong account, then compare again. Investigate remaining differences; do not invent a sale or expense just to make balances match.
Practical scenario
Example: transferring 100 from cash to bank
In the same currency, cash is 500 and bank is 800, totaling 1,300. After transferring 100, cash is 400 and bank is 900; total remains 1,300. If bank shows 1,000, check whether the transfer was also entered as a separate receipt.
Common Pitfalls & How to Avoid Them
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Related guides
Know exactly where your money is and where it goes
Monitor cash and bank balances in real time. Keep collections, payments, transfers, and operational expenses clearly separated.