How to balance a checkbook and keep a check register

Why should you still balance a checkbook?

Your bank knows what has cleared, but only you know what is on the way. A check you mailed yesterday, a deposit you dropped off after hours and an automatic payment scheduled for Friday are all invisible in today's online balance. The register is where those live, and balancing is how you prove the two views agree.

It is also a fraud control. Under the Uniform Commercial Code, you must examine statements with reasonable promptness, and a customer who does not report an unauthorized signature or alteration within one year loses the right to challenge it. For electronic transfers on consumer accounts, Regulation E sets a 60 day window after the statement to report errors. Business account agreements often set tighter deadlines, so balance every month at least.

What columns does a check register have?

Most registers have six to eight columns. The FDIC's Money Smart materials describe a register with the number, date, description, payment or debit, deposit or credit, and balance.

Record everything, not just checks: debit card purchases, ATM withdrawals, ACH payments, transfers and fees. A register that only tracks checks will never balance.

How do you balance a checkbook step by step?

• Get the statement for the period, printed or downloaded
• In your register, tick every check, deposit and debit that appears on the statement
• Add to your register any fees, interest or automatic items the bank recorded that you missed
• Start with the ending balance on the statement
• Add deposits in your register that are not on the statement yet
• Subtract checks and debits in your register that have not cleared yet
• Compare this adjusted bank balance with your updated register balance
• If they match, you are balanced; if not, find the difference before moving on

What does a checkbook reconciliation look like with real numbers?

Here is a worked example for a September statement.

The two adjusted balances agree at $8,825.25, so the account is balanced. Checks 1052 and 1054 carry forward as outstanding to next month's reconciliation.

Why don't your register and statement match?

Timing differences are normal. The FDIC lists deposits not yet credited, checks not yet cleared and after hours ATM transactions as the usual reasons. Real errors come from a short list:

The divide by 9 test is worth remembering: any transposition of two digits produces a difference that divides evenly by 9. If a check clears for a different amount than you wrote, pull the image right away. If the payee or amount has changed, call your bank's fraud line.

How do you handle voided, stopped and stale checks in the register?

A voided check stays in the register with a zero amount so the number sequence is complete. A stopped check gets reversed, with a note of the stop payment date. A check that has been outstanding for months deserves a call to the payee, because under the UCC a bank may refuse a check presented more than six months after its date. Our guides on how to void a check and how long a check is good for explain each case.

Should you use a paper register, a spreadsheet or software?

Any method works if you record every transaction and reconcile monthly. Paper registers are fast for a few handwritten checks. A spreadsheet adds automatic running balances. Accounting software such as QuickBooks or Xero imports bank transactions and has a reconcile screen that follows the same steps above.

Software makes one shortcut tempting: ticking items in the reconcile screen until the difference reaches zero, or posting an adjustment for the gap. Resist both. Tick only what actually appears on the statement, and if a difference remains, trace it with the table above. An adjustment that hides a $40 gap this month can hide an altered check next month.

For a business, keep each month's reconciliation report with the statement. When your accountant closes the year, a clean set of monthly reconciliations with short, explained outstanding lists is the fastest way to confirm the cash balance on your books.

Whatever you use, write the amount exactly, cents included. A check for 1,250.50 recorded as 1,250.05 leaves a 45 cent gap that is tedious to trace. Our guide to writing a check with cents shows the written line that should match your register.

Which checks make record keeping easier?

Checks that leave a record behind make balancing faster. Duplicate wallet checks leave a carbon copy of each check in the book. Three to a page business checks come in a binder with a side stub for each check, where you note the date, payee, amount and purpose before tearing the check off. Voqado three to a page checks start at $10.79 for 54 at the time of writing, in general purpose, invoice and payroll layouts. For every field on the front, see our step by step guide on how to write a check.