A bank statement is a periodic record from your bank showing all transactions, deposits, withdrawals and the running balance for your account over a specific period.
Bank statements are the independent record against which you reconcile your accounting records. They show every transaction processed by the bank during the statement period including deposits, withdrawals, fees, interest, direct debits and transfers. In the era of cloud accounting and bank feeds, paper bank statements have largely been replaced by digital feeds that import transactions in real-time. However, the bank statement remains the authoritative record for reconciliation purposes. When reconciling, you compare each transaction in your accounting software to the bank statement to identify discrepancies. Common differences include timing differences (transactions recorded in your books but not yet processed by the bank), bank-initiated transactions (fees, interest) not yet recorded in your books and errors on either side. SortBooks speeds up reconciliation by showing which bank transactions match your invoices and bills, but the underlying principle of verifying against the bank statement remains fundamental to bookkeeping integrity.
SortBooks helps with the bookkeeping behind bank statement by connecting to your Xero account and using AI to suggest the right account for transactions sitting in catch-all accounts, learning from your own past coding. Instead of fixing bank statement by hand, you review each suggestion, approve it, and SortBooks updates Xero, GST code included. Then ask the AI CFO about your numbers, using live Xero data.
Bank reconciliation is the process of matching your accounting records to your bank statement to ensure they agree. It identifies discrepancies, errors and missing transactions.
A bank feed is an automatic, real-time connection between your bank account and your accounting software that imports transactions directly, eliminating manual data entry.
A cash book is a financial record that tracks all cash receipts and payments in and out of a business. In modern bookkeeping, it is typically maintained through your accounting software's bank register.
Reconciliation is the process of comparing two sets of records to ensure they agree. Common types include bank reconciliation, accounts receivable reconciliation and intercompany reconciliation.
Internal controls are processes and procedures designed to safeguard business assets, ensure accurate financial reporting and prevent fraud or errors.
Connect Xero, check the AI's suggestions and approve the changes. SortBooks updates Xero for you.