Department: Finance & Accounting Process Owner: Controller Last Updated: January 2026
1. Overview and Purpose
Objective: To establish the process for reconciling all bank accounts to the general ledger (GL) on a monthly basis, ensuring that each account's ending balance agrees with the bank statement, all transactions are properly classified, and reconciling items are documented and resolved.
2. Scope
This SOP applies to all active bank accounts managed by the organization, including operating, reserve, grant-specific, and project-based accounts. It covers:
- Retrieval of statements
- Tie-out to GL balances
- Identification of reconciling items
- Documentation and approvals
3. GL Accounts Reconciled
List all bank accounts your organization maintains. Include the GL account number from your chart of accounts and a brief description of each account's purpose. Update the table below with your organization's specific accounts.
| GL Number | Bank Account Description |
|---|---|
| GL10XX | Operating Checking Account |
| GL10XX | Restricted Funds Account |
| GL10XX | Savings / Reserve Account |
| GL10XX | Payroll / Disbursement Account |
| Add rows as needed |
4. Step-by-Step Process
4.1 Retrieve Monthly Bank Statements
- Log into relevant banking portals
- Download PDF statements for all accounts listed above
- Save in designated shared folder: Month-End Close → Bank Reconciliations → [Month-Year]
Reviewer / Back-up: Accounting Supervisor
4.2 Export Ending GL Balances
- In your accounting system, export Trial Balance for the month-end date
- Capture ending balance for each bank-related GL account
- Paste balances into Bank Reconciliation Template (Excel) for comparison
Reviewer / Back-up: Accounting Supervisor
4.3 Perform Reconciliation in Template
For each account:
- Enter GL balance and bank balance
- Calculate variance
- Identify reconciling items:
- Outstanding checks
- Deposits in transit
- Timing delays (e.g., electronic transfers in process)
- Bank fees and interest income (record in GL if not yet posted)
- Provide brief description and source for each reconciling item
Reviewer / Back-up: Senior Accountant
Best Practice: Establish a materiality threshold for reconciling items that require immediate investigation and escalation. Document this threshold in your accounting policies manual.
4.4 Attach Backup Documentation
- For reconciling items, attach relevant backup:
- PDF check images
- Deposit screenshots
- Email confirmations
- GL entry references
- Save to shared folder in corresponding subfolder for each bank account
- Label clearly with GL number, month, and reconciling item type
Reviewer / Back-up: Accounting Supervisor
4.5 Review and Sign Off
- Completed reconciliations are reviewed by Controller
- Reviewer signs off in Reconciliation Sign-Off Log (Excel) with name / initials and date
- Outstanding items over 30 days are flagged, tracked, and require documented resolution plans approved by Controller
- Final package stored in Month-End Close folder and linked to financials
Assigned to: Controller / Senior Accountant
5. Key Roles and Responsibilities
| Role | Responsibilities |
|---|---|
| Accounting Coordinator | Prepare reconciliations and compile documentation |
| Senior Accountant | Review reconciling items and verify documentation |
| Controller / Finance Director | Final review and sign-off of all reconciliations |
6. Key Files and Systems
- Accounting System Trial Balance & GL Reports – For extracting ending balances
- Bank Portals – For retrieving monthly statements
- Bank Reconciliation Template (Excel) – Working file for tie-outs
- Reconciliation Sign-Off Log (Excel) – Tracker of status and approvals
- Shared Drive Close Folder – Central repository for statements and support
7. Exceptions and Special Cases
- New Accounts: Assigned a new GL number and added to template
- Accounts with No Activity: Still reconciled to confirm zero movement
- Foreign Currency Accounts: Reconciled in USD with current FX rate
- Closed Accounts: Reconciled up to final activity and archived
8. Risks and Controls
| Process Step | Risk | Control |
|---|---|---|
| 4.1 Retrieve Monthly Bank Statements | Delayed retrieval may lead to missed reconciliation deadlines | All statements are saved by Day 2 of close cycle |
| 4.2 Export Ending GL Balances | Using outdated GL balance may cause inaccurate variance analysis | Export date is always matched to bank statement end date |
| 4.3 Perform Reconciliation in Template | Unexplained variances may mask errors or fraud | All differences must be fully explained and documented |
| 4.4 Attach Backup Documentation | Unsupported reconciling items weaken audit trail and internal control | All backup is stored with consistent naming in a central location |
| 4.5 Review and Sign Off | Lack of oversight may result in uncorrected errors or stale items | Dual review ensures reconciliations are timely, accurate, and complete |
