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You can also track outstanding checks and deposits on the reconciliation form so you can add them to your balance in your bank account. This will help you not think you have more than you actually do. You can track every transaction and keep a better eye on your spending habits. This can help you set up and maintain your budget. Most people find that overdrafting their bank accounts can cause them to incur overdraft fees and other bad charges.
The other benefit of using a template for reconciling your account on a monthly schedule is that it allows you to identify any accounting error at an earlier stage. This could result in you saving overdraft fees, embarrassment and having your debit card declined or a check bounce. This allows you to list each transaction that you have logged in your checkbook and those that the banks have. After you have verified all transactions, reconciliation takes place. You are only left with the ones that you don’t match. These can be subtracted from the bank’s balance to make it match the bank’s.
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