Help Center / Bank Reconciliation

Resolving Discrepancies

Bank reconciliation discrepancies occur when bank transactions don't match accounting entries. This article explains how to investigate and resolve common discrepancies.

What is this page about

This page covers what to do when your bank balance and your ledger disagree: how to trace where the difference started, which discrepancies resolve on their own, and how to handle amount mismatches, duplicates, and aged items. Read it during a reconciliation that will not balance.

On this page

  • Types of Discrepancies
  • Investigating Discrepancies with All Transactions
  • Timing Differences
  • Outstanding Items
  • Data Entry Errors
  • Missing GL Entries
  • Missing Bank Transactions
  • Duplicate Transactions
  • Amount Mismatches
  • Investigating Aged Items
  • Month-End Reconciliation Adjustments
  • Exporting Unmatched Items
  • Multi-Account Reconciliation
  • Escalation Process
  • Preventing Discrepancies
  • Related Articles

Types of Discrepancies

Unmatched Bank Transactions: transactions on the bank statement with no corresponding GL entry

Unmatched GL Entries: accounting entries with no corresponding bank transaction

Amount Mismatches: the same transaction appears in both but with different amounts

Timing Differences: the same transaction but on different dates, which is the most common and easiest to fix

Duplicate Transactions: the same transaction appears twice in the bank feed or GL

Investigating Discrepancies with All Transactions

When you see a balance discrepancy, the All transactions tab shows every bank transaction for the account in one view, making it easier to pinpoint when and where the difference occurred.

To investigate a discrepancy:

  1. Go to Accounting → Bank reconciliation and select the account

  2. Click the All transactions tab

  3. You'll see every transaction with its status:

    • Matched: transaction reconciled to a GL entry
    • Unmatched: transaction has no corresponding GL entry
    • Excluded: transaction marked as excluded from reconciliation

  4. Use the Period filter to narrow the date range and isolate when the discrepancy began

  5. Use the search bar to find a specific transaction by transaction ID, reference, or business partner name

  6. Review the Opening balance (shown at top) and Closing balance (shown at bottom) to verify they match your bank statement for that period

  7. Click Export to CSV to download the data for your records or further analysis

This view helps you spot patterns. If several transactions show "Unmatched" on the same day, for example, that may indicate a batch import issue or a missing journal entry.

Timing Differences

The most common discrepancy is timing—when the bank posts a transaction before or after your GL:

Scenario 1: Bank posts first

  • You initiated a payment (wire, ACH) several days ago
  • Bank has already deducted the amount
  • Your GL entry posts later (when you send the instruction, not when the bank processes it)
  • Fix: Wait for GL entry to post, then reconcile

Scenario 2: GL posts first

  • You created and posted an invoice to a customer
  • Customer hasn't paid yet
  • Fix: Wait for payment, then reconcile when the deposit appears

Timing differences resolve naturally as transactions flow through the system. They don't require manual intervention.

Outstanding Items

Items that legitimately won't reconcile on a given date:

Outstanding Checks: cheques you have written but recipients haven't cashed yet

Deposits in Transit: customer payments received but not yet cleared by the bank

Pending Transactions: transactions the bank shows as pending and has not yet posted

These items will reconcile eventually when the bank processes them. Include them in your reconciliation reserve calculation.

Data Entry Errors

Sometimes discrepancies result from mistakes:

Wrong Amount: the GL entry amount doesn't match the bank transaction

Wrong Account: the entry was posted to the wrong GL account

Wrong Date: the entry is dated differently from the transaction date

To fix:

  1. Identify the incorrect entry
  2. Correct it, or reverse it and re-create it. An entry still in draft can be deleted outright
  3. Re-attempt reconciliation

Important: Only correct errors during the current period. For prior periods, post correcting journal entries instead of modifying posted entries.

Missing GL Entries

A bank transaction exists but has no corresponding GL entry:

Example: Bank fee charged by the bank; no GL entry created

To fix:

  1. Create a journal entry for the item via Accounting → Journal entries:

    • Account: Which GL account (usually Expense for fees)
    • Amount: The transaction amount
    • Description: What the transaction was for
    • Date: Match the bank transaction date

  2. Post the journal entry

  3. Back in Accounting → Bank reconciliation, on the Unmatched tab, select the bank transaction on the left and the new ledger entry on the right, then click Match

Tip: For recurring items like bank fees, select the unmatched bank transaction and click Convert to rule. This opens a pre-filled rule form for you to review and confirm — once confirmed, Light automatically creates and matches a journal entry the next time a similar transaction appears.

This is common for:

  • Bank fees and interest
  • Automatic transfers between accounts
  • Government-mandated withholding
  • Third-party collections

Missing Bank Transactions

A GL entry exists but doesn't appear on the bank statement:

Example: You initiated a payment that won't settle for several days; GL entry is posted but transaction isn't on the bank yet.

To fix:

  1. Identify when the transaction should appear (settlement date)
  2. Wait for the bank to process it
  3. When it appears, reconcile normally

If a transaction doesn't appear after expected settlement time:

  1. Check the GL entry for accuracy
  2. Contact your bank to verify they have the instruction
  3. If the payment was lost, initiate a stop-payment and re-issue

Duplicate Transactions

If the same transaction appears twice:

In bank feed:

  • On GoCardless feeds, Light detects duplicates during import and excludes them. Excluded rows sit outside your default transaction view, so you won't see the duplicate listed
  • On other feed providers, and on CSV imports, check the transaction ID yourself. Where they are identical, select the duplicate and click Exclude

In GL:

  • Someone may have entered a transaction manually that already came from a feed
  • Compare dates and amounts
  • Reverse or void the duplicate entry and keep the original. An entry still in draft can be deleted outright
  • Reconcile the transaction to the feed

Across systems:

  • The same transaction is recorded in both bank and GL
  • Match them, since this is a correct pair
  • Where it really is a duplicate, reverse one side and reconcile

Amount Mismatches

When amounts differ, investigate the cause:

Rounding Difference (e.g., $100.005 becomes $100.01)

  • Matching requires the selected amounts to balance exactly (the Difference indicator must show 0.00)
  • Post a small adjustment journal entry for the rounding difference and include it in the match

Bank Fees (e.g., Invoice for $1,000 but you received $999.50)

  • Bank deducted $0.50 fee
  • When you match the transactions and mark the difference as bank fees, Light automatically creates a journal entry for the fee against the Bank fees account and includes it in the match

FX Conversion (multi-currency)

  • Amount in original currency differs when converted
  • This is expected; Light calculates FX gains and losses automatically when the transactions are reconciled

Calculation Error

  • Someone miscalculated; correct the GL entry
  • Re-attempt reconciliation

Investigating Aged Items

Items unmatched for more than 30 days need investigation:

  1. Go to Accounting → Bank reconciliation and open the account

  2. On the Unmatched tab, use the date filter to show only older transactions (e.g., "Transactions before" a given date)

  3. Click an item to see details

  4. Investigate:

    • Is this a timing difference that will resolve?
    • Is there a data error that needs fixing?
    • Should this be excluded from reconciliation?

  5. Take appropriate action

The longer an item remains unmatched, the more likely it's an error.

Month-End Reconciliation Adjustments

If you can't fully reconcile by month-end:

  1. Identify all unmatched items

  2. For items you're confident will reconcile:

    • Create a reserve account entry
    • Debit/credit "Unreconciled Items" temporarily
    • When items reconcile next period, reverse the entry

  3. For items you believe are errors:

    • Create journal entry to correct the discrepancy
    • Document the correction for audit purposes

  4. Complete month-end with a note explaining adjustments

This approach allows you to close the period while tracking discrepancies.

Exporting Unmatched Items

Export a list of all unmatched items:

  1. Go to Accounting → Bank reconciliation and open the account
  2. Click the All transactions tab and filter by status Unmatched. You can also export directly from the Unmatched tab, which works for the bank transactions panel and the closed-ledger-entries panel, though the open documents panel has no export option
  3. Click Export to CSV for investigation

Use this export in your reconciliation documentation.

Multi-Account Reconciliation

When reconciling multiple accounts, check:

  • Interdepartmental transfers: transfers between your own accounts should appear as balanced pairs
  • Netting: some transactions may net across accounts
  • Consolidated view: the total of all accounts should match your consolidated GL

If one account shows a credit and another doesn't show the debit, investigate the inter-account transfer.

Escalation Process

For discrepancies you can't resolve:

  1. Document what you've found
  2. Ask for help from your finance manager or controller
  3. They may contact the bank to investigate
  4. The bank can provide detailed transaction information
  5. Work with them to resolve the discrepancy

Follow up on unmatched items rather than leaving them, since they compound over time.

Preventing Discrepancies

  • Match frequently: matching daily or weekly prevents large accumulations
  • Post accurately: make sure GL entries match supporting documents exactly
  • Monitor feeds: check that bank feeds are importing correctly
  • Use references: include invoice or cheque numbers in bank transactions where possible
  • Document manually: for manual entries, note the source document
  • Review monthly: catch discrepancies early, before they cascade

Was this article helpful?

Book a demo